nep-mac New Economics Papers
on Macroeconomics
Issue of 2011‒11‒28
53 papers chosen by
Soumitra K Mallick
Indian Institute of Social Welfare and Business Management

  1. Firms entry, monetary policy and the international business cycle By Cavallari Lilia
  2. Improving the Monetary Policy Frameworks in Central America By Stephanie Medina Cas; Alejandro Carrión-Menéndez; Florencia Frantischek
  3. Investment shocks and macroeconomic co-movement By Francesco Furlanetto; Gisle J. Natvik; Martin Seneca
  4. The theoretical framework of monetary policy revisited By Hiona Balfoussia; Sophocles N. Brissimis; Manthos D. Delis
  5. Fiscal Policy and Current Account Dynamics in Case of Pakistan By Javid, Attiya Y.; Javid, Muhammad; Arif, Umaima
  6. A Dynamic General Equilibrium Analysis of Monetary Policy Rules, Adverse Selection and Long-Run Financial Risk By Blommestein, Hans J.; Eijffinger, Sylvester C W; Qian, Zongxin
  7. The Policy Interest-Rate Pass-Through in Central America By Stephanie Medina Cas; Alejandro Carrión-Menéndez; Florencia Frantischek
  8. Macroeconomic implications of downward wage rigidities By Fahr Stephen
  9. Inflation Dynamics in the CEMAC Region By Marcos Poplawski-Ribeiro; Carlos Caceres; Darlena Tartari
  10. Relative prices, the price level and inflation: Effects of asymmetric and sticky adjustment By Shruti Tripathi; Ashima Goyal
  11. Talking to the inattentive public: How the media translates the Reserve Bank’s communications By Monique Reid; Stan Du Plessis
  12. Fiscal Policy Discretion, Private Spending, and Crisis Episodes By Luca Agnello; Davide Furceri; Ricardo M. Sousa
  13. Monetary operating procedures: Principles and the Indian process By Ashima Goyal
  14. Niurong as the target for NGDP targeting: Mario Draghi's nightmare? By Belgodere, Antoine
  15. Monetary Policy, Bank Leverage, and Financial Stability By Fabian Valencia
  16. Persistent Liquidity Effects and Long Run Money Demand By Alvarez, Fernando E; Lippi, Francesco
  17. Restrictive Fiscal Policies in Europe: What are the Likely Effects? By C. KERDRAIN; V. LAPÈGUE
  18. Unemployment and productivity in the long run: The role of macroeconomic volatility By Benigno Pierpaolo; Surico Paolo; Ricci Luca Antonio
  19. Rapid Credit Growth: Boon or Boom-Bust? By Selim Elekdag; Yiqun Wu
  20. Household debt and labour market fluctuations By Javier Andrés; José E. Boscá; Javier Ferri
  21. The possibility of ideological bias in structural macroeconomic models By Saint-Paul, Gilles
  22. Learning by Disinflating By Alina Barnett; Martin Ellison
  23. What do we really know about the long-term evolution of central banking? Evidence from the past, insights for the present By Stefano Ugolini
  24. Rules-based economic governance in the European Union: A reappraisal of national fiscal rules By Benczes, Istvan
  25. War, Inflation, Monetary Reforms and the Art Market .The Belgian Art market (1944 – 1951) By Géraldine David; Kim Oosterlinck
  26. The "Austerity Myth": Gain without Pain? By Perotti, Roberto
  27. Rethinking equilibrium conditions in macromonetary theory: A conceptually rigorous approach By Piet-Hein Van Eeghen
  28. Negative nominal interest rates: History and current proposals By Ilgmann, Cordelius; Menner, Martin
  29. Business cycle: From birth to the Austrian school theory By Vieru, Elena Bianca
  30. Anticipating the Great Depression? Gustav Cassel’s Analysis of the Interwar Gold Standard By Douglas A. Irwin
  31. Financial Liberalization And Demand For Money: A Case of Pakistan By Khan , Rana Ejaz Ali; Hye, Qazi Muhammad Adnan
  32. Towards Effective Macroprudential Policy Frameworks: An Assessment of Stylized Institutional Models By Luis Ignacio Jácome; Erlend Nier; Jacek Osinski; Pamela Madrid
  33. Macroprudential Policy: What Instruments and How to Use Them? Lessons from Country Experiences By Cheng Hoon Lim; Alejo Costa; Torsten Wezel; Akira Otani; Francesco Columba; Mustafa Saiyid; X. Wu; Piyabha Kongsamut
  34. Financial stress and economic activity in Germany and the Euro Area By Björn van Roye
  35. Predicting Recessions: A New Approach For Identifying Leading Indicators and Forecast Combinations By Turgut Kisinbay; Chikako Baba
  36. Nowcasting US GDP: The role of ISM Business Surveys By Kajal Lahiri; George Monokroussos
  37. Fiscal Consolidation and Income Inequality By Luca Agnello; Ricardo M. Sousa
  38. Conditions for turning the ex ante risk premium into an ex post redemption for EU government debt By Colignatus, Thomas
  39. The New Version of the Model MZE, Macroeconometric Model for the Eurozone By M. BARLET; M.-É. CLERC; M. GARNERO; V. LAPÈGUE; V. MARCUS
  40. In-Sample and Out-of-Sample Prediction of Stock Market Bubbles: Cross-Sectional Evidence By Helmut Herwartz; Konstantin A. Kholodilin
  41. Impact of US Quantitative Easing Policy on Emerging Asia By Morgan, Peter J.
  42. Consumption, Wealth, Stock and Housing Returns: Evidence from Emerging Markets By Guglielmo Maria Caporale; Ricardo M. Sousa
  43. Are Stock and Housing Returns Complements or Substitutes? Evidence from OECD Countries By Guglielmo Maria Caporale; Ricardo M. Sousa
  44. How do Banking Crises Impact on Income Inequality? By Luca Agnello; Ricardo M. Sousa
  45. G-20 Reforms of the International Monetary System: An Evaluation By Edwin M. Truman
  46. Politics Matter: Changes in Unionization Rates in Rich Countries, 1960-2010 By John Schmitt; Alexandra Mitukiewicz
  47. The Impact of the Macroeconomy on Health Insurance Coverage: Evidence from the Great Recession By John Cawley; Asako S. Moriya; Kosali I. Simon
  48. Political dispensation and macroeconomic performance in Nigeria (1970-2009) By SAIBU, Olufemi Muibi; FAKANBI, KEHINDE Ernest; AGBOOLA, Olawode Wasiu
  49. Supramacroeconomics: the newest management technology By Kozhurin, Fedir
  50. Kriza 2008-20XY: Populizam i puna zaposlenost kao sukobljeni ciljevi By Josip Tica
  51. From IRAP to CBIT: Tax distortions and redistributive effects By Manzo Marco; Monteduro Maria Teresa
  52. Acerca da importância da sincronização do ciclo económico português no contexto europeu By António Caleiro
  53. Esigi Asinca : Kredi Notunun “Yatirim Yapilabilir” Seviyeye Yukselmesinin Etkileri By Ibrahim Burak Kanli; Yasemin Barlas

  1. By: Cavallari Lilia
    Abstract: This paper provides a novel theory of the international business cycle grounded on firms entry and sticky prices. It shows that under simple monetary rules pro-cyclical entry can generate fluctuations in consumption, output and investment as large as those observed in the data while at the same time providing positive international comovements and highly volatile terms of trade. The capacity to capture these stylized facts of the international business cycle overcomes the well-known difficulties of the standard open economy real business cycle model in this regard. Numerical simulations show that floating regimes exacerbate counter-cyclical markup movements. Fixed regimes, on the other hand, lead to an increase in the volatility of?firm entry.
    Keywords: product variety, firm entry, international business cycle, monetary policy, interest rate rules, exchange rate regimes
    JEL: E31 E32 E52
    Date: 2011–11
  2. By: Stephanie Medina Cas; Alejandro Carrión-Menéndez; Florencia Frantischek
    Abstract: Several Central American (CADR) countries with independent monetary policies are strengthening their monetary frameworks and some have implemented or are moving towards inflation targeting (IT) regimes. Strengthening the monetary policy frameworks of CADR is key to improving the effectiveness of monetary policy. The paper reviews the literature on the reforms needed for strengthening the monetary policy frameworks, and examines the experiences of IT countries, Chile, Peru, and Uruguay to help distill lessons for CADR. It also constructs an index to measure the relative strength of the monetary policy framework of CADR countries.
    Keywords: Central America , Central banks , Chile , Cross country analysis , Inflation targeting , Monetary policy , Peru , Uruguay ,
    Date: 2011–10–26
  3. By: Francesco Furlanetto (Norges Bank (Central Bank of Norway)); Gisle J. Natvik (Norges Bank (Central Bank of Norway)); Martin Seneca (Norges Bank (Central Bank of Norway))
    Abstract: Recent studies find that shocks to the marginal efficiency of investment are a main driver of business cycles. Yet, they struggle to explain why consumption co-moves with real variables such as investment and output, which is a typical feature of an empirically recognizable business cycle. In this paper we show that within a conventional business cycle model, rule-of-thumb consumption provides a straightforward explanation of macroeconomic co-movement after a shock to the marginal efficiency of investment.
    Keywords: Investment shocks, consumption, rule-of-thumb consumers, nominal rigidities, co-movement
    JEL: E32
    Date: 2011–08–31
  4. By: Hiona Balfoussia (Bank of Greece); Sophocles N. Brissimis; Manthos D. Delis (City University)
    Abstract: The three-equation New-Keynesian model advocated by Woodford (2003) as a self-contained system on which to base monetary policy analysis is shown to be inconsistent in the sense that its long-run static equilibrium solution implies that the interest rate is determined from two of the system’s equations, while the price level is left undetermined. The inconsistency is remedied by replacing the Taylor rule with a standard money demand equation. The modified system is seen to possess the key properties of monetarist theory for the long run, i.e. monetary neutrality with respect to real output and the real interest rate and proportionality between money and prices. Both the modified and the original New-Keynesian models are estimated on US data and their dynamic properties are examined by impulse response analysis. Our research suggests that the economic and monetary analysis of the European Central Bank could be unified into a single framework.
    Keywords: Monetary theory; Central banking; New-Keynesian model; Impulse response analysis
    JEL: E40 E47 E52 E58
    Date: 2011–09
  5. By: Javid, Attiya Y.; Javid, Muhammad; Arif, Umaima
    Abstract: The study empirically investigates the effects of fiscal policy or government budget deficit shocks on the current account and the other macroeconomic variable: real output, real interest rate and exchange rate for Pakistan over the period 1960-2009. The structural Vector Autoregressive model is employed; the exogenous fiscal policy shocks are identified after controlling the business cycle effects on fiscal balances. The results suggest that an expansionary fiscal policy shock improves the current account and depreciates the exchange rate. The rise in private saving and the fall in investment contribute to the current account improvement while the exchange rate depreciation. The twin divergence of fiscal deficit and current account deficit is also explained by the output shock which seems to drive the current account movements and its comovements with the fiscal balance.
    Keywords: Restricted Vector Autoregressive model; current account; government budget deficit; fiscal policy; exchange rate
    JEL: E62 E61
    Date: 2011
  6. By: Blommestein, Hans J.; Eijffinger, Sylvester C W; Qian, Zongxin
    Abstract: This paper builds a dynamic general equilibrium macro-finance model with two types of borrowers: entrepreneurs who want to produce and gamblers who want to play a lottery. It links central bank's interest rate policy to expected cash flows of both types. This link enables us to study how the interactions between various shocks and different monetary policy rules affect the borrower pool faced by financial intermediaries. We find that when the economy is hit by an expansionary monetary policy shock, the proportion of entrepreneurs in the borrower pool will be persistently lower than the steady state level after a short period. It is lowest when the central bank does not react to output fluctuations. Quite differently, not reacting to output fluctuations avoids a persistent worsening of the borrower pool in the long run if the shock is a bad productivity shock.
    Keywords: Adverse Selection; Financial Crisis; Monetary Policy
    JEL: E44 E52
    Date: 2011–11
  7. By: Stephanie Medina Cas; Alejandro Carrión-Menéndez; Florencia Frantischek
    Abstract: Several Central American (CADR) central banks with independent monetary policies have adopted policy interest rates as their main instrument to signal their monetary policy stances, often in the context of adopting or transitioning to inflation targeting regimes. This paper finds that the interest-rate transmission mechanism, or the pass-through of the policy rate to market rates, is generally weaker and slower in CADR than in the LA6, the countries selected as benchmarks. A variety of potential factors behind this finding are examined, including the degrees of financial dollarization, exchange rate flexibility, bank concentration, financial sector development, and fiscal dominance. Through panel data analysis, the study suggests that the transmission mechanism can be strengthened by increasing exchange rate flexibility, and, over time, by adopting measures towards reducing financial dollarization, developing the financial sector, and reducing bank concentration.
    Keywords: Central America , Central banks , Cross country analysis , Dollarization , Inflation targeting , Interest rate policy , Monetary policy ,
    Date: 2011–10–19
  8. By: Fahr Stephen
    Abstract: Growth of wages, unemployment, employment and vacancies exhibit strong asymmetries between expansionary and contractionary phases. In this paper we analyze to what degree downward wage rigidities in the bargaining process aect other variables of the economy. We introduce asymmetric wage adjustment costs in a New-Keynesian DSGE model with search and matching frictions in the labor market. We nd that the presence of downward wage rigidities strongly improves the t of the model to the skewness of variables and the relative length of expansionary and contractionary phases even when detrending the data. Due to the asymmetry, wages increase more easily in expansions, which limits vacancy posting and employment creation, similar to the exible wage case. During contractions nominal wages decrease slowly, shifting the main burden of adjustment to employment and hours worked. The asymmetry also explains the diering transmission of positive and negative demand shocks from wages to ination. Downward wage rigidities help explaining the asymmetric business cycle of many OECD countries where long and smooth expansions with low growth rates are followed by sharp but short recessions with large negative growth rates.
    Keywords: labor market, unemployment, downward wage rigidity, asymmetric adjustment costs, non—linear dynamics
    JEL: E31 E52 C61
    Date: 2011–11
  9. By: Marcos Poplawski-Ribeiro; Carlos Caceres; Darlena Tartari
    Abstract: This paper analyses inflation dynamics in the Central African Economic and Monetary Community (CEMAC) using a constructed dataset for country-specific commodity price indices and panel cointegrated vector autoregressive (VAR) models. Imported commodity price shocks are significant in explaining inflation in the region. Governments are another driving force of inflation dynamics mainly through controlled prices and the role of capital expenditure in domestic activity. In most CEMAC countries, the largest effect of global food and fuel prices occurs after four or five quarters in noncore inflation and then decays substantially over time. Second-round effects are significant only in Cameroon and to a lesser extent in the Republic of Congo.
    Keywords: Central Africa , Central African Economic and Monetary Community , Commodity price fluctuations , Commodity prices , Cross country analysis , Economic models , Energy prices , External shocks , Food imports , Government expenditures , Imports , Inflation , Price controls ,
    Date: 2011–10–07
  10. By: Shruti Tripathi (Indira Gandhi Institute of Development Research); Ashima Goyal (Indira Gandhi Institute of Development Research)
    Abstract: The paper examines how relative price shocks can affect the price level and then inflation. Using Indian data we find: (i) price increases exceed price decreases. Aggregate inflation depends on the distribution of relative price changes-inflation rises when the distribution is skewed to the right, (ii) such distribution based measures of supply shocks perform better than traditional measures, such as prices of energy and food. They moderate the price puzzle, whereby a rise in policy rates increases inflation, and are significant in estimations of New Keynesian aggregate supply, (iii) an average Indian firm changes prices about once in a year; the estimated Calvo parameter implies half of Indian firms reset their prices in any period, and 66 percent of firms are forward looking in their price setting. The implication of these estimated real and nominal price rigidities for policy are drawn out.
    Keywords: WPI, NKPC, asymmetric, stickiness, size, frequency, inflation
    JEL: E31 E12 C32
    Date: 2011–10
  11. By: Monique Reid; Stan Du Plessis
    Abstract: Central bank communication is widely recognised as crucial to the implementation of monetary policy. This communication should enhance a central bank’s management of the inflation expectations of the financial markets as well as the general public — the latter being a part of the central bank’s audience that has received relatively little research attention. In this paper, the role of the media in transmitting the SARB’s communication to the general public is explored, with the aim of improving our understanding of its impact on the expectations channel of the monetary policy transmission mechanism. A deliberate evaluation of this channel could aid the design of future strategies to communicate with the general public.
    Keywords: South Africa, central bank communication, consistency, monetary policy transmission mechanism, transparent monetary policy.
    JEL: E42 E52 E58
    Date: 2011
  12. By: Luca Agnello (Banque de France); Davide Furceri (International Monetary Fund); Ricardo M. Sousa (Universidade do Minho - NIPE)
    Abstract: In this paper, we assess the impact of fiscal policy discretion on economic activity in the short and medium-term. Using a panel of 132 countries from 1960 to 2008, we find that fiscal policy discretion provides a net stimulus to the economy in the short-run and crowding-in effects are amplified once crisis episodes are controlled for– in particular, banking crises - giving a great scope for fiscal policy stimulus packages. However, crowding-out effects take over in the long-run – especially, in the case of debt crises -, in line with the concerns about long-term debt sustainability.
    Keywords: Fiscal policy discretion, GDP growth, private consumption, private investment, crowding-in, crowding-out
    JEL: E0 E6
    Date: 2011
  13. By: Ashima Goyal (Indira Gandhi Institute of Development Research)
    Abstract: As markets deepen and interest elasticities increase it is optimal for emerging markets to shift towards an interest rate instrument since continuing monetization of the economy implies money demand shocks are large. In an extension of the classic instrument choice problem to the case of frequent supply shocks, it is shown the variance of output is lower with the interest rate rather than a monetary aggregate as instrument, if the interest elasticity of aggregate demand is negative, and the interest elasticity of money demand is high or low. It is necessary to design an appropriate monetary policy response to supply shocks. An evaluation of India's monetary policy procedures and of the recent fine-tuning of the liquidity adjustment facility finds them to be in tune with these first principles and in the direction of international best practices. But a survey of country experiences and procedures, and some aspects of the Indian context suggest further improvements.
    Keywords: Monetary policy, operating procedures, instrument problem, LAF
    JEL: E58 E52
    Date: 2011–10
  14. By: Belgodere, Antoine
    Abstract: NGDP targeting is presented by some macroeconomists as a good practice for central banks. But what should be the target value? I propose a relevant measure: the Non Increasing Unemployment Rate Of Nominal Growth (NIURONG). I use NIURONG to show how difficult would have been for European Central Bank to implement a relevant monetary policy for each Euro Area country in front of post-2008 economic downturn.
    Keywords: NDGP targeting; monetary policy; Optimal Currency Areas
    JEL: E58
    Date: 2011–11–20
  15. By: Fabian Valencia
    Abstract: This paper develops a model to assess how monetary policy rates affect bank risk-taking. In the model, a reduction in the risk-free rate increases lending profitability by reducing funding costs and increasing the surplus the monopolistic bank extracts from borrowers. Under limited liability, this increased profitability affects only upside returns, inducing the bank to take excessive leverage and hence risk. Excessive risk-taking increases as the interest rate decreases. At a broader level, the model illustrates how a benign macroeconomic environment can lead to excessive risk-taking, and thus it highlights a role for macroprudential regulation.
    Keywords: Monetary policy , Bank rates , Profits , Interest rates on loans , Interest rates on deposits , Credit risk , Bank supervision ,
    Date: 2011–10–25
  16. By: Alvarez, Fernando E; Lippi, Francesco
    Abstract: We present a monetary model in the presence of segmented asset markets that im- plies a persistent fall in interest rates after a once and for all increase in liquidity. The gradual propagation mechanism produced by our model is novel in the literature. We provide an analytical characterization of this mechanism, showing that the magnitude of the liquidity effect on impact, and its persistence, depend on the ratio of two parameters: the long-run interest rate elasticity of money demand and the intertemporal substitution elasticity. At the same time, the model has completely classical long-run predictions, featuring quantity theoretic and Fisherian properties. The model simultaneously explains the short-run "instability" of money demand estimates as-well-as the stability of long-run interest-elastic money demand.
    Keywords: money demand
    JEL: E5
    Date: 2011–11
  17. By: C. KERDRAIN (Insee); V. LAPÈGUE (Insee)
    Abstract: In Europe, fiscal policy will be distinctly more restrictive from 2011 onwards. The fiscal consolidation efforts scheduled for 2011 represent 1.2 percentage points of GDP in the eurozone and 1.8 percentage points in the UK. Such adjustments hit short-term demand and depress activity by Keynesian effects. However, non-Keynesian mechanisms can attenuate them, not least through expectations and supply effects. The impact of fiscal consolidation is also related to the economic background: in line with the recent developments on sovereign bond markets, fiscal variables are found to have a significant impact on interest rate spreads on euro area public bonds. According to our main result, when debt exceeds 100 percentage points of GDP, the marginal effect on the spread of one additional point of debt would be about 7 to 8 basis points. Accordingly, fiscal consolidation is likely to weigh down on euro area sovereign risk premiums. In this light, the NiGEM international macroeconomic model is used to assess the GDP impact of European fiscal consolidation plans. Overall, euro area's GDP in 2011 is estimated to have been 0.6% lower than in a scenario without fiscal consolidation. This impact may however be an upper bound: these simulations do not take account of the possibility of a sudden increase of financial distress following a major loss of confidence in the sovereign bonds of some euro area countries.
    Keywords: Fiscal consolidation, sovereign risk spread, eurozone
    JEL: E6 H6
    Date: 2011
  18. By: Benigno Pierpaolo; Surico Paolo; Ricci Luca Antonio
    Abstract: We propose a theory of low-frequency movements in unemployment based on asymmetric real wage rigidities. The theory generates two main predictions: long-run unemployment increases with (i) a fall in long-run productivity growth and (ii) a rise in the variance of productivity growth. Evidence based on U.S. time series and on an international panel strongly supports these predictions. The empirical specifications featuring the variance of productivity growth can account for two U.S. episodes which a linear model based only on long-run productivity growth cannot fully explain. These are the decline in long-run unemployment over the 1980s and its rise during the late 2000s.
    Keywords: unemployment, productivity growth, volatility
    JEL: E0 E20 E40
    Date: 2011–11
  19. By: Selim Elekdag; Yiqun Wu
    Abstract: Episodes of rapid credit growth, especially credit booms, tend to end abruptly, typically in the form of financial crises. This paper presents the findings of a comprehensive event study focusing on 99 credit booms. Loose monetary policy stances seem to have contributed to the build-up of credit booms across both advanced and emerging economies. In particular, domestic policy rates were below trend during the pre-peak phase of credit booms and likely fuelled macroeconomic and financial imbalances. For emerging economies, while credit booms are associated with episodes of large capital inflows, international interest rates (a proxy for global liquidity) are virtually flat during these periods. Therefore, although external factors such as global liquidity conditions matter, and possibly increasingly so over time, domestic factors (especially monetary policy) also appear to be important drivers of real credit growth across emerging economies.
    Keywords: Asia , Credit expansion , Monetary policy , Liquidity , Capital inflows , Financial crisis , Interest rates , Bank soundness , Corporate sector , International liquidity ,
    Date: 2011–10–20
  20. By: Javier Andrés (Universidad de Valencia); José E. Boscá (Universidad de Valencia); Javier Ferri (Universidad de Valencia)
    Abstract: The co-movements of labor productivity with output, total hours, vacancies and unemployment have changed since the mid 1980s. This paper offers an explanation for the sharp break in the fl uctuations of labor market variables based on endogenous labor supply decisions following the mortgage market deregulation. Our exercise shows that the dynamic pattern of the labor market variables might have been substantially affected by the increase in household leverage in the US in the last twenty years. We set up a search model with effi cient bargaining and fi nancial frictions, in which impatient borrowers can take an amount of credit that cannot exceed a proportion of the expected value of their real estate holdings. When borrowers’ equity requirements are low, the impact of a positive technology shock on the marginal utility of consumption is strengthened, which in turn results in lower hours per worker and higher wages in the bargaining process. This shift in labor supply discourages fi rms from opening vacancies, reducing the impact of the shock on employment.
    Keywords: business cycle, labor market, borrowing restrictions
    JEL: E24 E32 E44
    Date: 2011–11
  21. By: Saint-Paul, Gilles (TSE)
    Date: 2011–06–08
  22. By: Alina Barnett; Martin Ellison
    Abstract: Disinflationary episodes are a valuable source of information for economic agents trying to learn about the economy. This paper is especially interested in how a policymaker can themselves learn by disinflating. The approach differs from the existing literature, which typically focuses on the learning of private agents during a disinflation. We build a model where both the policymaker and private agents learn, and ask what happens if the poicymaker has to disinflate to satisfy a new central bank mandate specifying greater emphasis on inflation stabilisation. In this case, our results show that inflation may fall dramatically before it gradually rises to its new long run level. The potential for inflation to undershoot its long run level during a disinflationary episode suggests that caution should be exercised when assessing the success of any change in the policymaker’s mandate.
    Keywords: Disinflation, Escape dynamics, Learning, Monetary policy
    JEL: D83 E52 E58
    Date: 2011
  23. By: Stefano Ugolini (Scuola Normale Superiore, Pisa)
    Abstract: The ongoing financial crisis is shaking central bankers’ certainties about their mission, and a rethinking of such mission can greatly benefit from a non-finalistic reassessment of how central banking has evolved over the centuries. This paper does so by taking a functional, instead of an institutional approach. The survey covers the provision of both microeconomic (financial stability) and macroeconomic (monetary stability) central banking functions in the West since the Middle Ages. The existence of a number of important trends (some unidirectional, some cyclical) is underlined. The findings have implications for the current debate on the institutional design of central banking, both in the U.S. and in the eurozone. Historical evidence suggests that neither changes in the organizational model of central banks nor government deficit monetization should necessarily be seen as evil; what is crucial to the success of any solution, is that the institutional agreement backing the existence of money-issuing organizations must be credible. The appendix provides a case study on Norway.
    Keywords: Central banking, monetary policy, financial stability, institutional design
    JEL: E42 E50 G21 N10 N20
    Date: 2011–11–21
  24. By: Benczes, Istvan
    Abstract: The economic and financial crisis of 2007/2009 has posed unexpected challenges on both the global and the regional level. Besides the US, the EU has been the most severely hit by the current economic crisis. The financial and banking crisis on the one hand and the sovereign debt crisis on the other hand have clearly shown that without a bold, constructive and systematic change of the economic governance structure of the Union, not just the sustainability of the monetary zone but also the viability of the whole European integration process can be seriously undermined. The current crisis is, however, only a symptom, which made all those contradictions overt that were already heavily embedded in the system. Right from the very beginning, the deficit and the debt rules of the Maastricht Treaty and the Stability and Growth Pact have proved to be controversial cornerstones in the fiscal governance framework of the European Economic and Monetary Union (EMU). Yet, member states of the EU (both within and outside of the EMU) have shown an immense interest in adopting numerical constraints on the domestic level without hesitation. The main argument for the introduction of national fiscal rules was mostly to strengthen the accountability and credibility of national fiscal policy-making. The paper, however, claims that a relatively large portion of national rules were adopted only after the start of deceleration of the debt-to-GDP ratios. Accordingly, national rules were hardly the sole triggering factors of maintaining fiscal discipline; rather, they served as the key elements of a comprehensive reform package of public budgeting. It can be safely argued, therefore, that countries decide to adopt fiscal rules because they want to explicitly signal their strong commitment to fiscal discipline. In other words, it is not fiscal rules per se what matter in delivering fiscal stability but a strong political commitment.
    Keywords: fiscal governance; fiscal consolidation; fiscal rules; European Union
    JEL: E62 H50 H60
    Date: 2011–07–05
  25. By: Géraldine David; Kim Oosterlinck
    Abstract: During World War II, the art market experienced a massive boom in occupied countries. The discretion, the inflation proof character, the absence of market intervention and the possibility to resell artworks abroad have been suggested to explain why investing in artworks was one of the most interesting opportunities under the German boot. On basis of an original database of close to 4000 artworks sold between 1944 and 1951 at Giroux, one of the most important Art Gallery in Brussels, this paper analyzes, the price movements on the Belgian art market following the liberation. Market reactions following the war are used to understand which motivations played the most important role in investors’ decisions. Prices on the art market experienced a massive drop. This huge price decline is attributed to two elements: fear of prosecution for war profits and the monetary reforms set into place in October 1944.
    Keywords: Art market; Art Investment; WWII; Belgium; Post-war; Monetary reforms
    JEL: N14 N44 Z11
    Date: 2011–11
  26. By: Perotti, Roberto
    Abstract: As governments around the world contemplate slashing budget deficits, the "expansionary fiscal consolidation hypothesis" is back in vogue. I argue that, as a statement about the short run, it should be taken with caution. Alesina and Perotti (1995) and Alesina and Ardagna (2010) (AAP) show that fiscal consolidations may be expansionary if implemented mainly by cutting government spending. IMF (2010) criticizes the data and methodology used by AAP, and reach opposite conclusions. I argue that because of the multi-year nature of the large fiscal consolidations, which are precisely the most informative ones, using yearly panels of fiscal policy is limiting. I present four detailed case studies, two -- Denmark and Ireland -- undertaken under fixed exchange rates (the most relevant case for many Eurozone countries today) and two -- Finland and Sweden -- after floating the currency. All four episodes were associated with an expansion; but only in Denmark the driver of growth was internal demand. However, after three years a long slump set in as the economy lost competitiveness. In all the others for a long time the main driver of growth was exports. In Ireland this occurred because the sterling coincidentally appreciated. In Finland and Sweden the currency experienced an extremely large depreciation after floating. In all consolidations interest rate fell fast, and wage moderation played a key role in generating a gain in competitiveness and a decline in interest rates. Wage moderation was facilitated by the direct intervention of the government in the wage negotiation process. In Finland and Sweden, the adoption of inflation targeting at the same time of the consolidation helped the decline in interest rates. These results cast doubt on at least some versions of the expansionary fiscal consolidations hypothesis, and on its applicability to many countries in the present circumstances. A depreciation is not available to EMU members today (except vis à vis countries outside the Eurozone). A net export boom is not feasible for the world as a whole. A further decline in interest rates is unlikely in the current situation. And incomes policies are not popular nowadays; moreover, international experience, and the Danish case, suggest that they are ineffective after a few years.
    Keywords: expansionary fiscal consolidations
    JEL: E62 E65 F32
    Date: 2011–11
  27. By: Piet-Hein Van Eeghen
    Abstract: Although still very much a minority view, there is a growing sense of unease about the high degree of abstraction involved in contemporary macro-monetary theory, in particular concerning its representative-agent microfoundation (see e.g. Colander et al., 2008; Goodhart, 2005, 2008; Buiter, 2009; Caballero, 2010; Hoover, 2010; Du Plessis, 2010; Meeusen, 2010). The paper shares this unease but questions another aspect of contemporary theory: its equilibrium conditions as consisting of its market coordination conditions and budget equation. The paper derives, from scratch, an alternative set of such conditions which it rigorously grounds in the nature of monetary exchange. This alternative set has implications for a wide variety of issues, including the aptness of MIU and CIA modelling, the nature of real and monetary disturbances, and the linkage between the financial and real sectors. The paper also assesses the conceptual soundness of commonly used constructs like Keynes’s income-spending (saving-investment) equation of IS analysis, Hicks’s wealth constraint, Fisher’s quantity equation, Walras’s Law, and the budget constraint of contemporary DSGE modelling.
    Keywords: monetary exchange, equilibrium condition, budget equation, market coordination, market price
    JEL: E11 E12 E40
    Date: 2011
  28. By: Ilgmann, Cordelius; Menner, Martin
    Abstract: Given the renewed interest in negative interest rates as a means for overcoming the zero bound on nominal interest rates, this article reviews the history of negative nominal interest rates and gives a brief survey over the current proposals that received popular attention in the wake of the financial crisis of 2007/08. It is demonstrated that taxing money proposals have a long intellectual history and that instead of being the conjecture of a monetary crank, they are a serious policy proposal. In a second step the article points out that, besides the more popular debate on a Gesell tax as a means to remove the zero bound on nominal interest rates, there is a class of neoclassical search-models that advocates a negative tax on money as efficiency enhancing. This strand of the literature has so far been largely ignored by the policy debate on negative interest rates. --
    Keywords: negative interest rates,history of economic thought,Silvio Gesell,zero bound,search-theoretical models,monetary policy
    Date: 2011
  29. By: Vieru, Elena Bianca
    Abstract: Approaching the theory of economic cycle is not an issue that comes in hand! We are permitted to make such a statement based on the idea that explanations concerning the business cycle theory are strictly related to how each school of thought was able to understand the system that makes market, with its habitual basic functions, operate; how was the idea of equilibrium understood and, last but not least, which is the role of the state in this entire „story”. Although some of the doctrines tend to insist on a particular factor, considered to be the most important one and also the one that is responsable for triggering the economic crisis, in fact we can talk about a consistent number of factors that include some worth mentioning like monetary expansion, state interventionism, excessive regulation, lack of regulation, low level of consumption, various changes in consumer preferences and so on. The serious problems that economy had to face during the years rise, therefore, many questions that require a thorough and consistent analysis. The limited space that we have at our disposal determines this essay to be considered only a „superficial” investigation of how the economic cycle can be addressed, from various points of view. Throughout this paper we will make a brief doctrinaire promenade starting with the monetary theory, reaching the Keynesian doctrine and finishing with the point of maximum interest, the Austrian School. Exhaustively passing through the theories mentioned above, along with their fundamental ideas about the phenomenon of economic cycles, does not represent the basis for the current paper. The specialized literature has no shortage of such work. The purpose of this research, as we will try to highlight, is to present the main differences that can be noticed between the ideologies that built, over time, their way into the history of economic thought. We are particularly interested in the problem of business cycle and the recurrence of crises.
    Keywords: Crisis; business cycle; Austrian School; Keynesian; Monetarist
    JEL: E32 E12 E50 B53 A11
    Date: 2011–11–20
  30. By: Douglas A. Irwin
    Abstract: The intellectual response to the Great Depression is often portrayed as a battle between the ideas of Friedrich Hayek and John Maynard Keynes. Yet both the Austrian and the Keynesian interpretations of the Depression were incomplete. Austrians could explain how a country might get into a depression (bust following an investment boom) but not how to get out of one (liquidation). Keynesians could explain how a country might get out of a depression (government spending on public works) but not how it got into one (animal spirits). By contrast, the monetary approach of economists such as Gustav Cassel has been ignored. As early as 1920, Cassel warned that mismanagement of the gold standard could lead to a severe depression. Cassel not only explained how this could occur, but his explanation anticipates the way that scholars today describe how the Great Depression actually occurred. Unlike Keynes or Hayek, Cassel explained both how a country could get into a depression (deflation due to tight monetary policies) and how it could get out of one (monetary expansion).
    JEL: E5 N1
    Date: 2011–11
  31. By: Khan , Rana Ejaz Ali; Hye, Qazi Muhammad Adnan
    Abstract: Literature in economics has identified many channels through which the financial liberalization may affect demand for money. There are evidences of stability as well as instability of demand for money due to financial development for developing economies. The objective of the current study is to examine the effect of financial liberalization on demand for money in Pakistan, i.e. whether financial liberalization has affected the demand for money or not. The issue is important as stable demand for money function is a prerequisite for formulating and operating monetary policy. To achieve the objective JJ cointegration and auto regressive distributed lag (ARDL) to the cointegration is employed to estimate the long-run equilibrium relationship between broad money M2 and composite financial liberalization index along with other determinants of demand for money like gross domestic product, real deposit rate and exchange rate. In order to assess the stability of the model, the parameter constancy tests, i.e. recursive residuals, CUSUM and CUSUMSQ tests have been applied. The empirical results indicated that for broad money, there exists long-run money demand function. The financial liberalization, gross domestic product and real deposit rate positively affect the demand for money in the long as well as short-run.
    Keywords: Demand for money; Financial liberalization; Real deposit rate; Financial reforms; Pakistan; ARDL
    JEL: E58 O53 E52 F31 E41
    Date: 2011–03–01
  32. By: Luis Ignacio Jácome; Erlend Nier; Jacek Osinski; Pamela Madrid
    Abstract: A number of countries are reviewing their institutional arrangements for financial stability to support the development of a macroprudential policy function. In some cases, this involves a rethink of the appropriate institutional boundaries between central banks and financial regulatory agencies, or the setting up of dedicated policymaking committees. In others, efforts are underway to enhance cooperation within the existing institutional structure. Against this background, this paper provides basic guidance for the design of effective arrangements, in a manner that can provide a framework for country-specific advice. After reviewing briefly the main institutional elements of existing and emerging macroprudential policy frameworks across countries, the paper identifies stylized institutional models based on key features that distinguish institutional arrangements. It develops criteria to assess the effectiveness of models, examines the strengths and weaknesses of models against these criteria, and explores ways to improve existing setups. The paper finally distills lessons and sets out desired principles for effective macroprudential policy arrangements.
    Keywords: Cross country analysis , Economic models , Fiscal policy , Governance , Monetary policy ,
    Date: 2011–10–31
  33. By: Cheng Hoon Lim; Alejo Costa; Torsten Wezel; Akira Otani; Francesco Columba; Mustafa Saiyid; X. Wu; Piyabha Kongsamut
    Abstract: This paper provides the most comprehensive empirical study of the effectiveness of macroprudential instruments to date. Using data from 49 countries, the paper evaluates the effectiveness of macroprudential instruments in reducing systemic risk over time and across institutions and markets. The analysis suggests that many of the most frequently used instruments are effective in reducing pro-cyclicality and the effectiveness is sensitive to the type of shock facing the financial sector. Based on these findings, the paper identifies conditions under which macroprudential policy is most likely to be effective, as well as conditions under which it may have little impact.
    Keywords: Banks , Capital inflows , Credit risk , Cross country analysis , Developed countries , Emerging markets , Exchange rate regimes , Financial risk , Financial sector , Fiscal policy , Liquidity , Monetary policy ,
    Date: 2011–10–19
  34. By: Björn van Roye
    Abstract: The financial crisis 2008-2009 and the European sovereign debt crisis have shown that stress on financial markets is important for analyzing and forecasting economic activity. Since financial stress is not directly observable but is presumably reflected in many financial market variables, it is useful to derive an indicator summarizing the stress component of these variables. Therefore, I derive a financial market stress indicator (FMSI) for Germany and the Euro Area using a dynamic approximate factor model. Subsequently, applying these indicators, I analyse the effects of financial stress on economic activity in a small Bayesian VAR model. An increase in financial stress leads to a significant dampening of GDP growth and the inflation rate. Additionally, there is a substantial and persistent decline in short-term nominal interest rates. I find that about fifteen percent of variation in real GDP growth can be accounted for variations in financial stress for Germany and about 30 percent in the Euro Area. I show that the inclusion of the indicator significantly improves out-of-sample forecasting accuracy for real GDP growth in Germany compared to a model without the indicator and other forecast benchmarks
    Keywords: Forecasting, Financial stress indicator, Financial Systems, Recessions, Slowdowns, Financial Crises
    JEL: E5 E6 F3 G2 G14
    Date: 2011–11
  35. By: Turgut Kisinbay; Chikako Baba
    Abstract: This study proposes a data-based algorithm to select a subset of indicators from a large data set with a focus on forecasting recessions. The algorithm selects leading indicators of recessions based on the forecast encompassing principle and combines the forecasts. An application to U.S. data shows that forecasts obtained from the algorithm are consistently among the best in a large comparative forecasting exercise at various forecasting horizons. In addition, the selected indicators are reasonable and consistent with the standard leading indicators followed by many observers of business cycles. The suggested algorithm has several advantages, including wide applicability and objective variable selection.
    Keywords: Business cycles , Economic forecasting , Economic indicators , Economic recession , Forecasting models , United States ,
    Date: 2011–10–13
  36. By: Kajal Lahiri; George Monokroussos
    Abstract: We study the role of the well-known monthly diffusion indices produced by the Institute or Supply Management in nowcasting current quarter US GDP growth. We investigate their marginal impact on these nowcasts when large unbalanced (jagged edge) macroeconomic data sets are used in real time to generate them. We find some evidence that these ISM indices can be helpful in improving the nowcasts in the beginning of the month when new ISM information becomes available ahead of other monthly indicators.
    Date: 2011
  37. By: Luca Agnello (Banque de France); Ricardo M. Sousa (Universidade do Minho - NIPE)
    Abstract: In this paper, we assess the impact of fiscal consolidation on income inequality. Using a panel of 18 industrialized countries from 1970 to 2010, we find that income inequality significantly rises both during periods of fiscal consolidation and in the aftermath of such adjustments. In addition, fiscal authority that is driven by spending cuts seems to be more detrimental for income distribution than in the case of tax hikes. Considering the linkages between banking crises and fiscal consolidation, we show that the impact on the income gap is amplified when fiscal adjustments take place after the resolution of such financial turmoils. Our results also provide support for the Kuznets relationship and corroborate the idea that trade can lead to a more unequal distribution of income.
    Keywords: Fiscal consolidation, income inequality, Kuznets curve
    JEL: E62 E64 D63
    Date: 2011
  38. By: Colignatus, Thomas
    Abstract: Basel III classifies government debt as risk free while actual interest rates in the European Union (EU) show large differences not only because of liquidity but mainly because of the risk of default, as also reflected in credit default swaps. Curiously such debt defaults may not happen so that creditors do not need to cover losses. The risk premium then becomes a reward for taking a risk that does not materialize. Contagious fears create risk premia that destabilize government debts and national economies. A solution is to regard the risk premia as potential redemption that turns into actual redemption when the loan is served to maturity. A EU law may make this mandatory without serious restrictions to the credit market. The rule would be that governments under threat of default would issue only annuity loans with a centrally determined rate of interest. The market sentiment of increased risk then shows up in shorter maturities. Governments that can borrow only at shorter maturities but at higher annual liquidity requirements meet with strong incentives to better manage their economies. The paper investigates the conditions involved. An important distinction appears to exists between the risk free rate, the credit default risk premium, the liquidity premium and a stigma factor. While much of the debate in the EU seems to be about reducing the risk premium, the distinction between ex ante risk and ex post redemption allows to identify that true EU policy costs concern irrational stigma factors. Notably, aversion against Southern European debt, that differs from the risk free rate and the risk and liquidity premiums, has no rational base but can persist because it is rewarded.
    Keywords: Keywords: Economic stability; monetary policy; credit crunch; European Central Bank; CAPM; risk free rate; risk premium; liquidity premium; stigma effect;
    JEL: E00 A10 P16
    Date: 2011–11–17
  39. By: M. BARLET (Drees); M.-É. CLERC (Insee); M. GARNERO (Drees); V. LAPÈGUE (Insee); V. MARCUS (SGDD)
    Abstract: This paper presents the main improvements carried out to the macroeconometric model MZE since its creation in 2003. We have back-calculated the series over the period 1980-1995, in order to make the model more stable. To our knowledge, this paper is the first application of Kllians (1998) method to estimate coefficients and centered confidence intervals for an operational macroeconometric model. The new coefficients enable to get less inflationary responses to macroeconomic shocks than the previous version of MZE. The study is more nuanced and rigorous thanks to the confidence intervals around the main scenarios. It is thus possible to check the significance of the results at any horizon. At last, the new version of MZE enables to find conventional responses to international shocks, like the inflationary effect of a rise in oil prices or the delayed impact of a depreciation of the euro on the improvement of the trade balance.
    Keywords: Macroeconometric modelling, Forecasting, Confidence interval, Bootstrap
    JEL: C3 C5 E1 E2
    Date: 2011
  40. By: Helmut Herwartz; Konstantin A. Kholodilin
    Abstract: We evaluate the informational content of ex post and ex ante predictors of periods of excess stock (market) valuation. For a cross section comprising 10 OECD economies and a time span of at most 40 years alternative binary chronologies of price bubble periods are determined. Using these chronologies as dependent processes and a set of macroeconomic and financial variables as explanatory variables, logit regressions are carried out. With model estimates at hand, both in-sample and out-of-sample forecasts are made. Overall, the degree of ex ante predictability is limited if an analyst targets the detection of particular turning points of market valuation. The set of 13 potential predictors is classified in measures of macroeconomic or monetary performance, stock market characteristics, and descriptors of capital valuation. The latter turn out to have strongest in-sample and out-of-sample explanatory content for the emergence of price bubbles. In particular, the price to book ratio is fruitful to improve the ex-ante signalling of stock price bubbles.
    Keywords: Stock market bubbles, out-of-sample forecasting, financial ratios, OECD countries
    JEL: E27
    Date: 2011
  41. By: Morgan, Peter J. (Asian Development Bank Institute)
    Abstract: The adoption of quantitative easing (QE) policy by the United States (US) Federal Reserve Bank since early 2009 has aroused widespread concerns in Asia and elsewhere regarding its possible impact in terms of the weakening of the US dollar and stimulating capital outflows to emerging economies that might increase inflationary pressures in them. This report investigates possible impacts of US quantitative easing policy on Asian economies and financial markets.
    Keywords: quantitative easing; federal reserve bank; asian economies; emerging asia; financial markets
    JEL: E43 E52 E58 F31 F32
    Date: 2011–11–18
  42. By: Guglielmo Maria Caporale (Centre for Empirical Finance); Ricardo M. Sousa (Universidade do Minho - NIPE)
    Abstract: In this paper, we show, using the consumer’s budget constraint, that the residuals of the trend relationship among consumption, aggregate wealth, and labour income should predict both stock returns and housing returns. We use quarterly data for a panel of 31 emerging economies and find that, when agents expect future stock returns to be higher, they will temporarily allow consumption to rise. Regarding housing returns, if housing assets are complementary to stocks, then investors react in the same way. If, however, the increase in the exposure through risky assets is achieved by lowering the share of wealth held in the form of housing (i.e., when stock and housing assets are substitutes), then they will temporarily reduce their consumption.
    Keywords: consumption, wealth, stock returns, housing returns, emerging markets
    JEL: E21 E44 D12
    Date: 2011
  43. By: Guglielmo Maria Caporale (Centre for Empirical Finance); Ricardo M. Sousa (Universidade do Minho - NIPE)
    Abstract: In this paper we use a representative consumer model to analyse the equilibrium relation between the transitory deviations from the common trend among consumption, aggregate wealth, and labour income, cay, and focus on the implications for both stock returns and housing returns. The evidence based on data for 15 OECD countries shows that when agents expect future stock returns to be higher, they will temporarily allow consumption to rise. Regarding housing returns, if housing assets are seen as complements to stocks, then investors react in the same way, but if they are instead treated as substitutes consumption will be temporarily reduced.
    Keywords: consumption, wealth, stock returns, housing returns, OECD countries
    JEL: E21 E44 D12
    Date: 2011
  44. By: Luca Agnello (Banque de France); Ricardo M. Sousa (Universidade do Minho - NIPE)
    Abstract: We show that banking crises have an important effect on income distribution: inequality increases before banking crisis episodes and sharply decline afterwards. We also find that,while a large government size does not per se seem to reduce inequality, a rise in financial depth (i.e. better access to credit provided by the banking sector) contributes to a more equal distribution of income.
    Keywords: Inequality, banking crisis, financial depth, government size.
    JEL: E25 E44 G18
    Date: 2011
  45. By: Edwin M. Truman (Peterson Institute for International Economics)
    Abstract: At the recent Cannes G-20 summit, the international monetary system (IMS) reform agenda, along with a number of other important issues, was hijacked by the European crisis. Nevertheless, the G-20 countries and various international institutions conducted an intensive process of review and discussion of the IMS via conferences, working groups, and reports. A year ago French President Sarkozy and other French government officials set the agenda for IMS reform to include five elements: surveillance of the global economy and financial system, the international lender-of-last-resort mechanisms (global financial safety nets), the management of global capital flows, reserve assets and reserve currencies, and IMS governance. Little progress was made on most of these topics. On surveillance there was only one surprise in the form of commitments by a few countries to allow their automatic stabilizers to operate in the current slowdown; on the lender-of-last-resort issues, there will only be marginal steps forward; and on the management of capital flows, the progress that has been achieved over the past several years has been loosely codified, which is a substantive achievement. Overall, the G-20 summit at Cannes resulted in some useful mutual education but not much in terms of concrete accomplishments.
    Date: 2011–11
  46. By: John Schmitt; Alexandra Mitukiewicz
    Abstract: Researchers have offered several explanations for the decline in unionization. Many emphasize that “globalization” and the technological advances embodied in the “new economy” have made unions obsolete. However, if the decline in unionization is the inevitable response to the twin forces of globalization and technology, then we would expect unionization rates to follow a similar path in countries subjected to roughly similar levels of globalization and technology. This paper looks union membership and coverage for 21 rich economies, including the United States, and finds over the last five decades a wide range of trends in union membership and collective bargaining. The national political environment, not globalization or technology, is the most important factor driving long-run changes in unionization rates in the United States.
    Keywords: unions, unionization, globalization, technology
    JEL: E H J J5 J58 J8 J88 P P1
    Date: 2011–11
  47. By: John Cawley; Asako S. Moriya; Kosali I. Simon
    Abstract: This paper investigates the impact of the macroeconomy on the health insurance coverage of Americans. We examine panel data from the Survey of Income and Program Participation (SIPP) for 2004-2010, a period that includes the Great Recession of 2007-09. We find that a one percentage point increase in the state unemployment rate is associated with a 1.67 percentage point (2.12%) reduction in the probability that men have health insurance; this effect is strongest among college-educated, white, and older (50-64 year old) men. For women and children, the unemployment rate was not significantly correlated with the probability of health insurance coverage through any source. When one examines the source of coverage, it becomes apparent that a one percentage point increase in the unemployment rate is associated with a 1.37 percentage point (4.69%) higher probability that a child is covered by public health insurance. Based on the point estimates in this paper, we estimate that 9.3 million adult Americans, the vast majority of whom were men, lost health insurance due to a higher unemployment rate alone during the 2007-09 recession. This is roughly nine times more than lost health insurance during the previous (2001) recession. We conclude with a discussion of how components of recent health care reform may influence these relationships in the future.
    JEL: E32 J32 J6
    Date: 2011–11
  48. By: SAIBU, Olufemi Muibi; FAKANBI, KEHINDE Ernest; AGBOOLA, Olawode Wasiu
    Abstract: This study examines the extent to which Nigeria has benefited from its democratic experience since independence. Using simple descriptive statistics and data series from 1970 to 2009, the study showed that the trend in macroeconomic performance has not significantly improved. Indeed, the period of democratic regimes seemed more volatile than the other period of non-democratic regimes. The policy inferences from this analysis are that there is more to socioeconomic development than the form of government. Unless those development-enhancing factors are addressed, democracy may not lead to improved socioeconomic development in Nigeria.
    Keywords: Political Dispensation; Democratic Governance and Macroeconomic Performance
    JEL: P51 P16 E60
    Date: 2011
  49. By: Kozhurin, Fedir
    Abstract: A new management technology, based on modern developments in macroeconomics, was offered. It is aimed at the highest issues of state and society governing as well as finding methods of their solving. The grounding of necessity of separate supramacroeconomical level of management establishment was made; the methods and tools on its realization were developed. Examples of their implementation in Ukraine are still being interpreted.
    Keywords: supramacroeconomic; supramacroeconomics; macroeconomics; economic; economics; technology; management; development
    JEL: B00 A10 E60 C13 B40 H40 P41 C14 C02 C80 B41 C01
    Date: 2011–11–04
  50. By: Josip Tica
    Abstract: Ovaj rad analizira stilizirane empirijske činjenice o hrvatskog gospodarstvu u kontekstu jednostavnog statičkog Salter Swan modela bez mikroekonomskih osnova. Osnovna ideja rada je ukazati na činjenicu kako ekonomske politike predtranzicijskg razdoblja i posttranzicijskog razdoblja mogu biti jedine dvije alternative u ekonomskoj politici samo uz vrlo snažne pretpostavke koje ekonomski gledajući ne moraju stajati, ali su nažalost stekle političku popularnost zbog dugoročnosti uporabe. Prividni trade-off između ekonomske politike hiperinflacije s trgovinskom ravnotežom i ekonomske politike stabilnih cijena sa galopirajućim vanjskim dugom nije jedini izbor koji u ekonomskoj politici stoji pred nositeljima odluka. U radu se ukazuje na čitav niz srednjoročnih politika koje kroz novu dimenziju nude kod nas još neisprobane instrumente kojima je moguće postići ciljeve koji su unutar navedene dvije ekonomske politike naoko nepomirljivi.
    Keywords: puna zaposlenost, deprecijacija, hiperinflacija, vanjski dug, Salter Swan
    JEL: E17 E37 F41
    Date: 2011–11–11
  51. By: Manzo Marco; Monteduro Maria Teresa
    JEL: E32 E62 H25 H32
    Date: 2011–11
  52. By: António Caleiro (Universidade de Évora, Departamento de Economia & CEFAGE-UE)
    Abstract: Uma análise retrospectiva da sincronização do ciclo económico nacional com alguns ciclos económicos de referência permite retirar conclusões que suportam a necessidade premente de se apostar na produção nacional que, pelas suas características, seja exportável e/ou substituta de importações. Deste ponto de vista, o acréscimo na competitividade resulta ser necessário no modelo global de desenvolvimento, enquanto factor de crescimento da produtividade, mas também, por via do acréscimo nas exportações, em resultado dos ganhos associados à sincronização do ciclo económico nacional com o ciclo económico europeu. Este segundo aspecto, não tão evidente, mas igualmente importante para uma trajectória sustentada de crescimento, é o foco principal deste trabalho.
    Keywords: Análise de Sincronização, Ciclos Económicos, Portugal
    JEL: E32 E61
    Date: 2011
  53. By: Ibrahim Burak Kanli; Yasemin Barlas
    Abstract: Bu calismada 1990 yilindan itibaren kredi notu “yatirim yapilabilir” seviyeye yukseltilen ulkelerde finansal ve makroekonomik gostergelerin not artiriminin oncesi ve sonrasindaki egilimleri incelenmektedir. Analiz sonuclari, kredi notu yatirim yapilabilir seviyeye yukseltilen ulkelerin portfoy yatirimlari ve kredi kanallariyla yabanci sermayeye ulasim imkaninin arttigina, ne var ki dogrudan yabanci yatirimlarinda belirgin bir egilim degisiminin olmadigina isaret etmektedir. Not artisi sonrasi yurt disindan borclanma maliyeti duserken, borclanmanin vadesinde anlamli bir degisim kaydedilmemektedir. Yurt disi finansmana ulasimin kolaylasmasiyla, not artirimi oncesinde dusus egiliminde olan dis borc artis, cari denge ise bozulma egilimine girmektedir. Yurt disi kredi imkaninin artmasi yurt ici kredi piyasasina da yansimakta, ozel sektore acilan krediler ivmelenirken kredi faizleri dusmektedir. Ote yandan, not artisi sonrasi mutlak buyume hizi not artisi oncesi seviyelerin uzerinde gerceklesirken, goreli buyume performanslarinda istatistiksel olarak anlamli bir degisimden bahsedilememektedir.
    Keywords: Kredi notu, Yatirim yapilabilir seviye, Gelismekte olan ulkeler
    JEL: E44 F34 G15
    Date: 2011

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