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on Central Banking |
| By: | Miquel Faig; Belen Jerez |
| Abstract: | Inflation, as a tax on money, induces buyers to reduce their money balances. Sellers are aware of this, so to attract costumers, they post price offers that reduce the need for buyers to carry precautionary money balances. We study this effect of inflation in a competitive search environment where buyers experience preference shocks after they are matched with a seller. With full information, equilibrium price offers consist of a flat fee which is independent of the quantities purchased. With private information of buyers' preferences, equilibrium price offers are restricted by incentive compatibility constraints. As a result, the price schedule that maps quantities purchased onto payments must be increasing. As inflation rises, these price schedules become relatively flat, so the marginal cost of purchasing goods is low. Consequently, buyers that are not liquidity constrained (with a low desire to consume) purchase inefficiently large quantities. Meanwhile, buyers with a high desire to consume typically purchase inefficiently low quantities because, as their money balances fall, they become liquidity constrained. This is in contrast with the full information benchmark where inflation reduces the quantities purchased by all buyers. |
| Date: | 2005–04 |
| URL: | http://d.repec.org/n?u=RePEc:cte:werepe:we051708&r=cba |
| By: | Carin van der Cruijsen; Maria Demertzis |
| Abstract: | In contrast to previous empirical attempts to examine the effect ofincreasing central bank transparency on macroeconomic magnitudes, we investigate how the link between inflation and inflation expectations alters with increasing transparency. Our motivation stems from the belief that changes in the institutional features or operations of the Central Bank affect, first and foremost, the way that private agents form their expectations about the future behaviour of the Central Bank, and only through them, inflation. We apply the framework used by Levin et al (2004) who differentiate between inflation targeters and countries that do not have explicit quantitative objectives. They discover that inflation targeters benefit from a weaker link between inflation and expectations, and the more so for longer horizons. We, in turn, examine whether this observation still holds as central banks become more transparent. Our attempt is facilitated by the recent development of quantitative measures for transparency, used in the main text. We find that our results provide some evidence to substantiate the beneficial impact of transparency, on helping fix private sector expectations. |
| Keywords: | Central Bank Transparency; Infl;ation Expectations; Monetary Policy |
| JEL: | E31 E52 E58 |
| Date: | 2005–03 |
| URL: | http://d.repec.org/n?u=RePEc:dnb:dnbwpp:031&r=cba |
| By: | Li-Chun Yuan |
| Abstract: | Les évolutions technologiques apportent des solutions de paiement de détail innovantes (paiements par téléphone mobile par exemple). Ce cahier d'études aborde le sujet de la qualification des nouveaux instruments de paiement. Il contient une analyse basée sur la définition des différentes formes de monnaie (dont la monnaie électronique) et des instruments de paiement, dans le cadre général des paiements et des systèmes de paiement, ainsi que dans leur contexte réglementaire national et européen. Parmi les nouvelles possibilités technologiques, les systèmes de téléphonie mobile offrent des atouts techniques et commerciaux pour le développement de solutions de paiements mobiles d'ambition ubiquitaire. Comme pour certaines solutions électroniques de paiement de détail, les paiements mobiles sont l'occasion pour des entrepreneurs non liés au secteur bancaire de devenir des prestataires de paiement de masse. L'observation des caractéristiques et des modèles de solutions de paiement électroniques et mobiles permet d'identifier si cette participation tend à être coopérative ou concurrentielle avec les banques. S'agissant des paiements, la garantie de sécurité est primordiale. L'utilisation de réseaux de télécommunication ouverts (la téléphonie mobile, Internet, etc.) génère des craintes supplémentaires liées à la fraude et à la sécurité. Une partie est consacrée aux risques associés aux paiements électroniques et à leurs composantes de sécurité. Finalement sont abordées les différentes initiatives publiques et privées qui ont pour but de promouvoir la sécurité et l'efficience des paiements électroniques. Le Système européen de banques centrales est assez entreprenant en la matière. |
| Date: | 2003–11 |
| URL: | http://d.repec.org/n?u=RePEc:bcl:bclwop:cahier_etude_10&r=cba |
| By: | Patrick Lunnemann; Thomas Y. Mathä |
| Abstract: | The aim of this paper is to analyse the degree of inflation persistence in Luxembourg using disaggregate price index data from the Harmonised Index of Consumer Prices. The degree of inflation persistence is then compared to estimates for the EU15 and for the euro area as well as for the individual member countries according to a unified approach. In order to assess the robustness of our estimates both a parametric and a non-parametric measure of inflation persistence is used. Overall, our results suggest a relatively low degree of inflation persistence in Luxembourg. For a large number of sub-indices we are not only able to reject the unit root hypothesis, but also we find a low degree of inflation persistence relative to other EU15 countries and relative to the EU15 and euro area aggregates. For Luxembourg as well as the other EU15 countries, our results suggest substantial heterogeneity in the degree of inflation persistence across sub-indices. We find some support for the presence of aggregation effects, both across indices and countries. Structural break tests for all EU15 countries suggest the presence of structural changes in the inflation process owing to the inception of the single monetary policy and/or to the modified treatment of sales. |
| Date: | 2004–10 |
| URL: | http://d.repec.org/n?u=RePEc:bcl:bclwop:cahier_etude_12&r=cba |
| By: | Patrick Lunnemann; Abdelaziz Rouabah |
| Abstract: | Dans cette contribution, nous tentons de mener une analyse sur la compatibilité du comportement de l'Eurosystème en matière de conduite de la politique monétaire avec la règle dite de Taylor. Cette dernière a pour ambition d'établir une ligne de conduite qui s'impose aux autorités monétaires afin qu'elles puissent assurer une stabilité des agrégats macroéconomiques. Ainsi, la finalité de cette règle est la détermination d'un taux d'intérêt à court terme, supposé compatible avec les objectifs de la stabilité des prix et du maintien de l'output à son niveau potentiel. L'écart entre les taux calculés et les taux observés représente un indicateur de l'adéquation de la politique monétaire aux données économiques fondamentales. Au premier niveau, une attention particulière est accordée à la critique de la règle initiale de Taylor. Son application rétrospective sur des données relatives à l'Eurosystème se révèle peu concluante. Des ajustements des pondérations et/ou l'introduction de nouvelles variables sont nécessaires pour calquer sa trajectoire sur celle des taux observés. Au second niveau, l'usage de la règle de Taylor est étendue à l'évaluation des effets différenciés de la politique monétaire. Le calibrage de la règle selon les paramètres estimés pour la zone euro, sur de données observées au Luxembourg tend à confirmer cette hypothèse. |
| Date: | 2003–10 |
| URL: | http://d.repec.org/n?u=RePEc:bcl:bclwop:cahier_etude_9&r=cba |
| By: | Ya-Hwei Yang; Jia-Dong Shea |
| Abstract: | From 1999 to 2003, Taiwan faced a deflationary situation. The reasons for this deflation can be attributed to both domestic and global factors. Domestic changes including local political unrest, tensions with China, outbound investment to China, a weakened financial system, and a deteriorating government financial situation, provided the backdrop for the economic slowdown and corresponding deflation. A number of global factors, especially the bursting of the Internet and IT bubbles in late 2000 and the rise of China%u2019s economy, also heavily influenced both global and Taiwanese prices. This paper adopts a simplified aggregate demand and aggregate supply model to derive a deterministic equation of the GDP deflator (PGDP), and then applies quarterly data covering the period from 1982 to 2003 to estimate the PGDP equation using 2SLS. The empirical results are used to identify the sources of PGDP deflation in Taiwan. In addition, the phenomenon of price divergence appears since 2002 where the WPI increased and the CPI decreased. The causes of the WPI-CPI divergence are also investigated in this paper. |
| JEL: | E0 E3 E5 |
| Date: | 2005–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11244&r=cba |