|
on Macroeconomics |
|
Issue of 2012‒07‒14
fifty papers chosen by Soumitra K Mallick Indian Institute of Social Welfare and Business Management |
| By: | J. Scott Davis |
| Abstract: | This paper introduces a model where agents are unsure about the central bank's inflation target. They believe that the central bank's inflation target could lie between two extremes, and their beliefs vary depending on the central bank's stock of credibility. They form the expectations used in price and wage setting using this perceived inflation target, and they use past observations of inflation to update their beliefs about the credibility of the central bank. Thus a series of high inflation observations can lead them to believe (incorrectly) that the central bank has adopted a high target. High inflation expectations are incorporated into price and wage setting decisions, and a transitory shock to inflation can become very persistent. The model with endogenous credibility can match the volatility and persistence of both inflation and measures of long-term inflation expectations that we see in the data. The model is then calibrated to match the observed levels of Federal Reserve credibility in the 1980s and the 2000s. By simply changing the level of credibility, holding all else fixed, the model can explain nearly all of the observed changes in the volatility and persistence of inflation and inflation expectations in the U.S. from the 1980s to today. |
| Keywords: | Price levels |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddgw:117&r=mac |
| By: | Charles T. Carlstrom; Timothy S. Fuerst; Matthias Paustian |
| Abstract: | This paper revisits the size of the fiscal multiplier. The experiment is a fiscal expansion under the assumption of a pegged nominal rate of interest. We demonstrate that a quantitatively important issue is the articulation of the exit from the policy experiment. If the monetary-fiscal expansion is stochastic with a mean duration of T periods, the fiscal multiplier can be unboundedly large. However, if the monetary-fiscal expansion is for a fixed T periods, the multiplier is much smaller. |
| Keywords: | Business cycles |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwp:1215&r=mac |
| By: | César Calderón; Roberto Duncan; Klaus Schmidt-Hebbel |
| Abstract: | The literature has argued that developing countries are unable to adopt counter-cyclical monetary and fiscal policies due to financial imperfections and unfavorable politicaleconomy conditions. Using a world sample of 115 industrial and developing countries for 1984-2008, we find that the level of institutional quality plays a key role in countries' ability to implement counter-cyclical macroeconomic policies. The results show that countries with strong (weak) institutions adopt counter- (pro-) cyclical macroeconomic policies, reflected in extended monetary policy and fiscal policy rules. The threshold level of institutional quality at which monetary and fiscal policies are a-cyclical is found to be similar. |
| Keywords: | Interest rates ; Monetary policy ; Fiscal policy |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddgw:118&r=mac |
| By: | Michael Plante |
| Abstract: | This paper examines optimal monetary policy in a New Keynesian model, where the relative price of oil is affected by exogenous supply shocks and a productivity-driven demand shock. When wages are flexible, stabilizing core inflation is optimal and the nominal rate rises (falls) in response to a demand (supply) shock. When both prices and wages are sticky, core inflation falls (rises) in response to the demand (supply) shock. Stabilizing CPI inflation generates small welfare losses only if the demand shock is the main driver of oil prices. Based on a VAR estimated using post-1986 data for the U.S., both shocks have had minimal impacts on core inflation. The federal funds rate rises in response to the demand shock but falls in response to the supply shock, consistent with the predictions of the theoretical model for a policy that stabilizes core inflation. |
| Keywords: | Price levels ; Economic development |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddwp:1202&r=mac |
| By: | Fernández, Andrés (Research Department, Inter-American Development Bank); Gulan, Adam (Bank of Finland Research) |
| Abstract: | Countercyclical country interest rates have been shown to be both a distinctive characteristic and an important driving force of business cycles in emerging market economies. In order to account for this, most business cycle models of emerging market economies have relied on ad hoc and exogenous countercyclical interest rate processes. We embed a financial contract à la Bernanke et al. (1999) into a standard small open economy business cycle model that endogenously delivers countercyclical interest rates. We then take the model to the data. For this purpose we build a novel panel dataset for emerging economies that includes financial data, namely sovereign and corporate interest rates as well as leverage. We show that the model accounts well not only for countercyclical interest rates, but also for other stylized facts of emerging economies' business cycles, including the dynamics of leverage. |
| Keywords: | business cycle models; emerging economies; financial frictions |
| JEL: | E32 E44 F41 |
| Date: | 2012–06–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofrdp:2012_023&r=mac |
| By: | Rene TAPSOBA (Centre d'Etudes et de Recherches sur le Développement International); Alexandru MINEA (Centre d'Etudes et de Recherches sur le Développement International); Jean-Louis COMBES (Centre d'Etudes et de Recherches sur le Développement International) |
| Abstract: | This paper analyzes the effects of Inflation Targeting (IT) and Fiscal Rules (FR) on fiscal behaviors and inflation dynamics. Its main novelty is twofold: first, it is the first study which accounts explicitly for the role of the interactions between IT and FR regarding their fiscal and inflationary effects. Second, it questions the optimality of the sequence of adoption of IT and FR. Using a wide panel of 152 developed and developing countries over the period 1990-2009, we find that adopting both IT and FR leads to better fiscal and monetary outcomes than adopting only FR or only IT. In addition, we highlight the dominance of the sequence which consists of introducing first FR before adopting IT with respect to the opposite sequence, regarding their fiscal and inflationary effects. |
| Keywords: | Inflation Targeting, Fiscal rules, Interactions, Sequence of Adoption |
| JEL: | H62 E63 E58 E52 E31 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:cdi:wpaper:1370&r=mac |
| By: | Jean-Louis Combes (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Alexandru Minea (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Rene Tapsoba (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I) |
| Abstract: | This paper analyzes the effects of Inflation Targeting (IT) and Fiscal Rules (FR) on fiscal behaviors and inflation dynamics. Its main novelty is twofold: first, it is the first study which accounts explicitly for the role of the interactions between IT and FR regarding their fiscal and inflationary effects. Second, it questions the optimality of the sequence of adoption of IT and FR. Using a wide panel of 152 developed and developing countries over the period 1990-2009, we find that adopting both IT and FR leads to better fiscal and monetary outcomes than adopting only FR or only IT. In addition, we highlight the dominance of the sequence which consists of introducing first FR before adopting IT with respect to the opposite sequence, regarding their fiscal and inflationary effects. |
| Keywords: | Inflation Targeting;Fiscal rules;Interactions;Sequence of Adoption |
| Date: | 2012–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00714243&r=mac |
| By: | Stan Du Plessis; Kevin Kotze |
| Abstract: | The international financial crisis that started in 2007 and the subsequent end of the long expansion in South Africa has refocused attention on the business cycle. Prior to the crisis, the economies of both developed and developing countries experienced an extended period of low and stable inflation and stable real economic growth, an episode that has been called the "great moderation". The disruption of this era by the financial crisis has highlighted the importance of understanding the nature and causes of the great moderation, to assist policy makers in facilitating its resumption. This paper considers the historical evidence for the great moderation in South Africa with the aid of a time-varuing stochastic volatility model and various break-point tests |
| Keywords: | Business cycles, emerging market economies, quantitative analysis of business cycles |
| JEL: | C32 E32 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:297&r=mac |
| By: | Jens Boysen-Hogrefe |
| Abstract: | In the aftermath of the Great Recession and during the debt crisis in the euro area yields on German federal bonds have been exceptionally low. This analysis tries to calculate the profits that the federal government makes due to the low yields. The interest payments that are due to emissions of bonds and bills made between 2009 and 2012 are approximated and compared to several benchmark scenarios. Compared to the mean yields of the years 1999-2008 profits of the federal government are quite high (68 billion euros). Application of yield curve models show that most of these profits are due to the macroeconomic conditions in the euro area and to low central bank rates. To a much smaller extend these profits are due to flight into safety, which, however, has become more relevant recently |
| Keywords: | safe haven, interest payments, debt crisis, yield curve |
| JEL: | G12 H63 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1780&r=mac |
| By: | Greg Hannsgen |
| Abstract: | Recently, some have wondered whether a fiscal stimulus plan could reduce the government's budget deficit. Many also worry that fiscal austerity plans will only bring higher deficits. Issues of this kind involve endogenous changes in tax revenues that occur when output, real wages, and other variables are affected by changes in policy. Few would disagree that various paradoxes of austerity or stimulus might be relevant, but such issues can be clarified a great deal with the help of a complete heterodox model. In light of recent world events, this paper seeks to improve our understanding of the dynamics of fiscal policy and financial crises within the context of two-dimensional (2D) and five-dimensional heterodox models. The nonlinear version of the 2D model incorporates curvilinear functions for investment and consumption out of unearned income. To bring in fiscal policy, I make use of a rule with either (1) dual targets of capacity utilization and public production, or (2) a balanced-budget target. Next, I add discrete jumps and policy-regime switches to the model in order to tell a story of a financial crisis followed by a move to fiscal austerity. Then, I return to the earlier model and add three more variables and equations: (1) I model the size of the private- and public-sector labor forces using a constant growth rate and account for their social reproduction by introducing an unemployment-insurance scheme; and (2) I make the markup endogenous, allowing its rate of change to depend, in a possibly nonlinear way, on capacity utilization, the real wage relative to a fixed norm, the employment rate, profitability, and the business sector’s desired capital-stock growth rate. In the conclusion, I comment on the implications of my results for various policy issues. |
| Keywords: | Financial Crisis; Post-Keynesian Economics; Fiscal-policy Rule; Dynamical System; Markup Dynamics; Kalecki-Steindl Model of Effective Demand; Hyman Minsky; Automatic Stabilizers; Growth Cycles; Budget Deficit; Capacity-utilization Targeting Rule; Historical Time; Policy Regime Switches; Keynesian Kaleidics; Chartalism; Distributive Curve |
| JEL: | E12 E32 E62 J65 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_723&r=mac |
| By: | Stephen McKnight (El Colegio de México); Alexander Mihailov (University of Reading) |
| Abstract: | This paper examines the implications for equilibrium determinacy of forward-looking monetary policy rules in a Neo-Wicksellian model that incorporates real balance effects. We show that in closed economies the presence of small, empirically plausible real balance effects significantly restricts the ability of the Taylor principle to prevent indeterminacy of the rational expectations equilibrium. This problem is further exac- erbated in open economies, particulary if the monetary policy rule reacts to consumer- price, rather than domestic-price, inflation. These findings still hold even when output and the real exchange rate are introduced into the policy rule, thereby suggesting that the widespread neglect of real balance effects in the literature is ill-advised. |
| Keywords: | equilibrium determinacy; real balance effects; trade openness; forward- looking inflation targeting; taylor principle |
| JEL: | E41 E52 F41 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:emx:ceedoc:2012-10&r=mac |
| By: | Melecky, Ales; Melecky, Martin |
| Abstract: | This paper analyzes the effects of macroeconomic shocks on the government debt dynamics in an open economy using the analytical framework of Favero and Giavazzi (2007) extended to an open economy. Applying this modeling approach to the data for the Czech Republic, the authors derive some implications for fiscal policy. The modeling framework includes structural vector autoregression (SVAR) model, estimated using short-term identification restrictions, and non-linear specification of the government debt dynamics. The main variables of the analyzed system are GDP, inflation, the effective interest rate on government debt, government revenues and expenditures, the exchange rate and government debt. The estimation is carried out using the Bayesian approach. The results suggest that allowing for a non-linear dynamics in the government debt to GDP ratio could imply stronger persistence and higher volatility in the responses of government indebtedness to macroeconomic shocks. The fiscal stance of the Czech Republic seems to be most vulnerable to unexpected depreciation of the local currency, discretionary pro-cyclical increases in government expenditures, and deflationary shocks. |
| Keywords: | Government Debt; Non-linear Dynamics; Macroeconomic Shocks; Open Economy; Structural Vector Autoregression Model; Bayesian Estimation; Czech Republic |
| JEL: | E62 H68 E37 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:39761&r=mac |
| By: | Eagle, David M. |
| Abstract: | For U.S. recessions since 1948, we study paneled time series of (i) ExUR, the excess of the unemployment rate over the prerecession rate, and (ii) NGAP, the percent deviation of nominal GDP from its prerecession trend. Excluding the 1969-70 and 1973-75 recessions, a regression of ExUR on current and past values of NGAP has an R2 of 75%. Simulations indicate that NGDP targeting could have eliminated 84% of the average ExUR during the period from 1.5 years and 4 years after the recessions began. The maximum effect of NGAP on unemployment occurs with a lag of 2 to 3 quarters. |
| Keywords: | nominal GDP targeting; unemployment; recessions; business cycle |
| JEL: | E24 E52 E5 |
| Date: | 2012–03–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:39821&r=mac |
| By: | Marianna Kudlyak; Felipe Schwartzman |
| Abstract: | We conduct an accounting exercise of the role of worker flows between unemployment, employment, and labor force nonparticipation in the dynamics of the aggregate unemployment rate across four recent recessions: 1982-1983, 1990-1991, 2001, and 2007-2009 (the "Great Recession"). We show that, whereas during earlier recessions it was sufficient to examine the flows between employment and unemployment to account for the dynamics of the unemployment rate, this was not true in the Great Recession. The increased importance of the flows between nonparticipation and unemployment is documented across all age and gender groups. |
| Keywords: | Business cycles ; Unemployment ; Labor market |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedrwp:12-04&r=mac |
| By: | Sebnem Kalemli-Ozcan; Elias Papaioannou; Fabrizio Perri |
| Abstract: | We study the effect of financial integration (through banks) on the transmission of international business cycles. In a sample of 20 developed countries between 1978 and 2009 we find that, in periods without financial crises, increases in bilateral banking linkages are associated with more divergent output cycles.This relation is significantly weaker during financial turmoil periods, suggesting that financial crises induce co-movement among more financially integrated countries. We also show that countries with stronger, direct and indirect, financial ties to the U.S. experienced more synchronized cycles with the U.S. during the recent 2007-2009 crisis. We then interpret these findings using a simple general equilibrium model of international business cycles with banks and shocks to banking activity. The model suggests that the relation between integration and synchronization depends on the type of shocks hitting the world economy, and that shocks to global banks played an important role in triggering and spreading the 2007-2009 crisis. |
| JEL: | E32 F15 F36 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18209&r=mac |
| By: | Jonathan Benchimol (Economics Department - ESSEC Business School, CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon Sorbonne) |
| Abstract: | We propose a New Keynesian Dynamic Stochastic General Equilibrium (DSGE) model where a risk aversion shock enters a separable utility function. We analyze five periods, each one lasting twenty years, to follow over time the dynamics of several parameters (such as the risk aversion parameter), the Taylor rule coefficients and the role of this risk aversion shock on output and real money balances in the Eurozone. Our analysis suggests that risk aversion was a more important component of output and real money balance dynamics between 2006 and 2011 than it had been between 1971 and 2006, at least in the short run. |
| Keywords: | Risk aversion; Output; Money; Euro area; New Keynesian DSGE models; Bayesian estimation; |
| Date: | 2012–06–28 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:hal-00713669&r=mac |
| By: | Rodrigo Mariscal; Andrew Powell |
| Abstract: | There are many sources of inflation forecasts for Latin America. The International Monetary Fund, Latin Focus, the Economist Intelligence Unit and other consulting companies all offer inflation forecasts. However, these sources do not provide any probability measures regarding the risk of inflation. In some cases, Central Banks offer forecast and probability analyses but typically their models are not fully transparent. This technical note attempts to develop a relatively homogeneous set of methodologies and employs them to estimate inflation forecasts, probability distributions for those forecasts and hence probability measures of high inflation. The methodologies are based on both parametric and non-parametric estimation. Results are given for five countries in the region that have inflation targeting regimes. |
| JEL: | C53 E37 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:idb:wpaper:4785&r=mac |
| By: | Julie K. Smith |
| Abstract: | This paper investigates the forecasting accuracy of the trimmed mean inflation rate of the Personal Consumption Expenditure (PCE) deflator. Earlier works have examined the forecasting ability of limited-influence estimators (trimmed means and the weighted median) of the Consumer Price Index but none have compared the weighted median and trimmed mean of the PCE. Also addressed is the systematic bias that appears due to the differences in the means of inflation measures over the sample. This paper supports earlier results that limited-influence estimators provide better forecasts of future inflation than does the popular measure of core inflation, PCE inflation minus food and energy; therefore, these limited-influence estimators are core inflation. |
| Keywords: | Price levels ; Forecasting |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddwp:1203&r=mac |
| By: | Francisco Comín |
| Abstract: | This article provides a historical overview of the factors leading up to debt crises and the default methods used by the governments to solve them, ranging from repudiation and restructuring to inflation tax and financial repression. The paper also analyses the Spanish governments’ graduation to responsible public debt management under the democracy and the last debt crisis starting in 2010. After analysing the evolution of the outstanding public debt, the budget deficits, the Spanish economy’s ability to borrow, the central government’s debt affordability and the profile of the sovereign debt the article concludes that the Spanish case confirms the main hypothesis of Reinhart and Rogoff (2009) about international debt crisis, regarding to: short term borrowing enhanced the risk of a debt crisis; insolvency problems arose when the governments were unwilling or unable to repay the debt; debt crisis took place after large capital inflows; most outright defaults ended up being partial defaults; sovereign debt level became unsustainable when it rose above 60-90 % of GDP; default trough inflation became commonplace when fiat money displaced coinage; financial repression was used as a subtle type of debt restructuring; defaults endangered the creditworthiness of Spanish Finance Ministry and forced disciplined fiscal policies |
| Keywords: | Public debt, Default, Restructuring, Inflation tax, Financial repression, Fiscal policy |
| JEL: | E31 E4 E6 F3 F4 H6 N10 N23 N43 H63 F34 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:cte:whrepe:wp12-06&r=mac |
| By: | Lustig, Hanno; van Nieuwerburgh, Stijn; Verdelhan, Adrien |
| Abstract: | We derive new estimates of total wealth, the returns on total wealth, and the wealth effect on consumption. We estimate the prices of aggregate risk from bond yields and stock returns using a no-arbitrage model. Using these risk prices, we compute total wealth as the price of a claim to aggregate consumption. We find that US households have a surprising amount of total wealth, most of it human wealth. This wealth is much less risky than stock market wealth. Events in long-term bond markets, not stock markets, drive most total wealth fluctuations. The wealth effect on consumption is small and varies over time with real interest rates. |
| Keywords: | discount rate; equity risk premium; excess return; interest rate; risk premium; stock market; stock returns |
| JEL: | E21 G10 G12 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9022&r=mac |
| By: | Alain Durré (IESEG School of Management); Philippe Ledent (Economics School of Louvain, Belgium) |
| Abstract: | This paper attempts to better understand the monetary policy decisions under the Belgian two-tier foreign exchange market during the Bretton-Woods system. Whereas this type of market organisation aimed at insulating the domestic currency from (speculative) capital flows, it is questioned whether monetary authorities did (or not) really pay attention to the free market when setting the monetary policy interest rate in practice. Using a Taylor-rule type approach, it is shown that the volatility of the spread between the two segments of the foreign exchange market has played a growing role in the interest rate dynamics over time. Moreover, a Markov switching model applied to the data provides evidence of two separate periods towards the collapse of the Bretton-Woods System, during which the monetary policy concerns have gradually changed. |
| Keywords: | Two-tier market, Taylor rule, Bretton Woods, Markov switching model |
| JEL: | E42 E58 C32 C24 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:ies:wpaper:e201210&r=mac |
| By: | Philip Hans Franses; Michael McAleer (University of Canterbury); Rianne Legerstee |
| Abstract: | Macroeconomic forecasts are frequently produced, widely published, inten¬sively discussed and comprehensively used. The formal evaluation of such forecasts has a long research history. Recently, a new angle to the evaluation of forecasts has been addressed, and in this review we analyse some recent developments from that perspective. The literature on forecast evaluation predominantly assumes that macro¬economic forecasts are generated from econometric models. In practice, however, most macroeconomic forecasts, such as those from the IMF, World Bank, OECD, Federal Reserve Board, Federal Open Market Committee (FOMC) and the ECB, are typically based on econometric model forecasts jointly with human intuition. This seemingly inevitable combination renders most of these forecasts biased and, as such, their evaluation becomes non-standard. In this review, we consider the evaluation of two forecasts in which: (i) the two forecasts are generated from two distinct econo¬metric models; (ii) one forecast is generated from an econometric model and the other is obtained as a combination of a model and intuition; and (iii) the two forecasts are generated from two distinct (but unknown) combinations of different models and intu¬ition. It is shown that alternative tools are needed to compare and evaluate the fore-casts in each of these three situations. These alternative techniques are illustrated by comparing the forecasts from the (econometric) Staff of the Federal Reserve Board and the FOMC on inflation, unemployment and real GDP growth. It is shown that the FOMC does not forecast significantly better than the Staff, and that the intuition of the FOMC does not add significantly in forecasting the actual values of the economic fundamentals. This would seem to belie the purported expertise of the FOMC. |
| Keywords: | Macroeconomic forecasts; econometric models; human intuition; biased forecasts; forecast performance; forecast evaluation; forecast comparison |
| JEL: | C22 C51 C52 C53 E27 E37 |
| Date: | 2012–06–08 |
| URL: | http://d.repec.org/n?u=RePEc:cbt:econwp:12/12&r=mac |
| By: | Torbe M. Andersen (Department of Economics and Business, Aarhus University, Denmark) |
| Abstract: | Fiscal sustainability and fiscal policy targets |
| Keywords: | Fiscal sustainability, Intergeneration distribution, risk sharing, intermediate fiscal targets |
| JEL: | E6 H6 |
| Date: | 2012–07–07 |
| URL: | http://d.repec.org/n?u=RePEc:aah:aarhec:2012-15&r=mac |
| By: | Berggren, Niclas (Research Institute of Industrial Economics (IFN)); Daunfeldt, Sven-Olof (HUI Research AB); Hellström, Jörgen (Umeå School of Business and Economics) |
| Abstract: | Central banks have been made more independent in many countries. A common rationale has been the existence of a credibility (or lack-of-trust) problem for monetary policy. This indicates a possible and until now unexplored link between social trust and central-bank independence. Our empirical findings, based on data from 149 countries, confirm that there is such a link, in the form of a u-shaped relationship. We suggest that two factors help explain this finding: the need for this kind of reform and the ability with which it can be implemented. At low trust levels, the need for central-bank independence is strong enough to dominate the low ability; at high trust levels the ability for reform is high and dominates the low need; at intermediate trust levels there is neither need nor ability strong enough to generate very independent central banks. |
| Keywords: | Trust; Credibility; Reforms; Monetary Policy; Inflation; Central Bank; Time Inconsistency |
| JEL: | E52 E58 P48 Z13 |
| Date: | 2012–05–23 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:0920&r=mac |
| By: | Francisco de Castro (Banco de España and European Commission); Daniel Garrote (Banco de España) |
| Abstract: | We analyse the impact of government spending shocks on the real effective exchange rate and net exports in the Euro Area within a standard structural VAR framework. We employ a new database that contains quarterly fiscal variables for the Euro Area as a whole. We show that higher government spending leads to real exchange rate appreciation and to a fall in net exports, jointly with lower primary budgetary surpluses, which turns out to be fully consistent with the “twin deficits” hypothesis. The different components of public spending, namely wage and non-wage consumption expenditure, overall public consumption expenditure and public investment, bring about real appreciations. Our results are therefore also consistent both with the home-bias hypothesis of public expenditure and with public investment contributing to generating relative productivity gains in the traded goods sector. Contrary to what is observed in the Euro Area, the real effective exchange rate depreciates in the US in response to higher government spending. This discrepancy can ultimately be explained by the reaction of nominal interest rate spreads and the uncovered interest parity condition. The dissimilar reaction of short-term nominal interest rate spreads is attributed to two factors, namely the role of the US dollar as a "safe haven" currency and the countercyclical behaviour of discretionary government spending in the US. |
| Keywords: | Euro Area; SVAR; fiscal shocks; effective exchange rates; relative prices; twin deficits; fiscal multipliers |
| JEL: | E62 H30 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:1224&r=mac |
| By: | Chletsos, Michael; Roupakias, Stelios |
| Abstract: | This paper applies cointegration analysis and Granger non-causality tests in order to identify the direction of causality between migration in Greece and two macroeconomic variables: real per capita GDP and unemployment. We use annual data for the period 1980-2011. The data are drawn from the International Migration Statistics (OECD) and the International Monetary Fund Database (IMF). Our results provide empirical evidence that the growth rates of GDP and unemployment cause migration in Granger’s sense. On the contrary, evidence of reverse causality is not established. |
| Keywords: | Immigration; Unemployment; Growth |
| JEL: | E24 O10 J61 |
| Date: | 2012–06–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:39861&r=mac |
| By: | Maximo Camacho (Universidad de Murcia); Gabriel Perez-Quiros (Banco de España and CEPR); Pilar Poncela (Universidad Autónoma de Madrid) |
| Abstract: | We extend the Markov-switching dynamic factor model to account for some of the specifi cities of the day-to-day monitoring of economic developments from macroeconomic indicators, such as ragged edges and mixed frequencies. We examine the theoretical benefi ts of this extension and corroborate the results through several Monte Carlo simulations. Finally, we assess its empirical reliability to compute real-time inferences of the US business cycle. |
| Keywords: | Business cycles, output growth, time series |
| JEL: | E32 C22 E27 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:1205&r=mac |
| By: | KAMADA Koichiro; KURACHI Yoshiyuki |
| Abstract: | This paper analyzes the impact of an increase in Japanese government bonds (JGB) yields on the Japanese banks and the macro economy, based on the Financial Macro-econometric Model introduced by Ishikawa et al. (2011). When the yields on government bonds increase, banks incur unrealized losses in their bond holdings. The rise in government bonds yields also has a broad and recognizable impact on economic activities through an adverse feedback loop between the financial sector and the real economic sector. This paper simulates a situation in which the government bonds yields increase by one percentage point. According to the simulation results, the associated unrealized losses on bond holdings have only a limited impact on the Tier I ratio and would not substantially deteriorate the operations of the banking business. It should be noted, however, that the impact is lessened superficially by a number of "cushions," such as deferred tax assets and unrealized gains on bond holdings accumulated so far. This implies that as the rise in bond yields becomes larger, such cushion effects weaken relatively, and the impact of the yield change on the financial system and the real economy increases non-linearly. |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rdpsjp:12021&r=mac |
| By: | Jennifer L. Castle (Institute for New Economic Thinking, Oxford Martin School, University of Oxford, UK); Jurgen A. Doornik (Institute for New Economic Thinking, Oxford Martin School, University of Oxford, UK); David F. Hendry (Institute for New Economic Thinking, Oxford Martin School, University of Oxford, UK); Ragnar Nymoen (Economics Department, Oslo University, Norway) |
| Abstract: | Many economic models (such as the new-Keynesian Phillips curve, NKPC) include expected future values, often estimated after replacing the expected value by the actual future outcome, using Instrumental Variables or Generalized Method of Moments. Although crises, breaks and regime shifts are relatively common, the underlying theory does not allow for their occurrence. We show the consequences for such models of breaks in data processes, and propose an impulse-indicator saturation test of such specifications, applied to USA and Euro-area NKPCs. |
| Keywords: | Testing invariance; Structural breaks; Expectations; Impulse-indicator saturation; New-Keynesian Phillips curve |
| JEL: | C5 E3 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:rim:rimwps:50_12&r=mac |
| By: | Jean-Paul Fitoussi (Observatoire Francais des Conjonctures Economiques); Francesco Saraceno (Observatoire Francais des Conjonctures Economiques) |
| Abstract: | This paper argues that the European Union has gone farther than any other country or institution in internalizing the prescriptions of the Washington Consensus.Embedding neo-liberal principles in the treaties defining its governance,the EU has enshrined a peculiar doctrine within its constitution. We further argue that this "Berlin-Washinghton Consensus" has serious empirical and theoretical flaws, as its reliance on Pareto optimality leads to neglect the crucial links between current and potential growth. We show by means of a simple model that the call for structural reforms as an engine for growth may be controversial, once current and potential output are related. We claim that adherence to the Consensus may go a long way in explaining the poor growth performance of the European economy in the past two decades, because of the constraints that it imposed on fiscal and monetary policies. The same constraints have deepened the eurozone crisis that started in 2007,putting unwarranted emphasis on austerity and reform. Challenging the Consensus becomes a precondition for avoiding the implosion of the euro,and recovering growth. |
| Keywords: | Washington consensus, Neoclassical theory, Austerity, Structural reforms, Fiscal policy, Monetary policy, EU governance, ECB, Stability and growth pact, Fiscal compact |
| JEL: | E02 E32 E58 E62 E63 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:fce:doctra:1220&r=mac |
| By: | Koijen, Ralph; Lustig, Hanno; van Nieuwerburgh, Stijn |
| Abstract: | Value stocks have higher exposure to innovations in the nominal bond risk premium than growth stocks. Since the nominal bond risk premium measures cyclical variation in the market’s assessment of future output growth, this results in a value risk premium provided that good news about future output lowers the marginal utility of wealth today. In support of this mechanism, we provide new historical evidence that low return realizations on value minus growth, typically at the start of recessions when nominal bond risk premia are low and declining, are associated with lower future dividend growth rates on value minus growth and with lower future output growth. Motivated by this connection between the time series of nominal bond returns and the cross-section of equity returns, we propose a parsimonious three-factor model that jointly prices the cross-section of returns on portfolios of stocks sorted on book-to-market dimension, the cross-section of government bonds sorted by maturity, and time series variation in expected bond returns. Finally, a structural dynamic asset pricing model with the business cycle as a central state variable is quantitatively consistent with the observed value, equity, and nominal bond risk premia. |
| Keywords: | bond risk premium; cross-section of stock returns |
| JEL: | E21 E43 G00 G12 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9024&r=mac |
| By: | Hippolyte d'Albis (Centre d'Economie de la Sorbonne - Paris School of Economics); Emmanuelle Augeraud-Véron (MIA - Université de la Rochelle); Hermen Jan Hupkes (Department of Mathematics - University of Missouri - Columbia) |
| Abstract: | We study the well-posedness of initial value problems for nonlinear functional differential-algebraic equations of mixed type. We are interested in solutions to such problems that admit a single jump discontinuity at time zero. We focus specially on the question whether unstable equilibria can be stabilized by appropriately choosing the size of the jump discontinuity. We illustrate our techniques by analytically studying an economic model for the interplay between inflation and interest rates. In particular, we investigate under which circumstances the central bank can prevent runaway inflation by appropriately hiking the interest rate. |
| Keywords: | Functional differential equations, advanced and retarded arguments, interest rates, inflation rates, initial value problems, indeterminacy, impulsive equations. |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:12043&r=mac |
| By: | Teresa Ter-Minassian |
| Abstract: | This paper discusses Brazil’s structural reforms since the 1990s and areas where work remains to be done. Reforms of the 1990s included the containment of inflation, the adoption of a comprehensive Fiscal Responsibility Law, a successful debt restructuring program for subnational governments, the reduction of trade barriers, a wave of privatizations, and the expansion of health and education programs. Reforms of the 2000s included strengthening welfare programs, rapidly increasing the minimum wage, and reforming the financial sector to increase access to credit among lower income groups. Political opposition and other factors, however, have prevented reforms in the tax and pension systems and in the labor market. Brazil’s recent strong economic performance owes more to generally sound macroeconomic management, and to a favorable external environment, than to a comprehensive and sustained structural reform effort. Doubts remain about the country’s ability to sustain high growth rates while keeping inflation low. |
| JEL: | E02 E61 E65 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:idb:wpaper:4774&r=mac |
| By: | Das, Subhendu |
| Abstract: | Moneyless economy (MLE) does not have any money in the economy. All products and services are free for all people. This means everybody must work, work for free, and get everything they want for free also. Any work that a society needs is considered legitimate. MLE is not socialism. MLE has the ability to provide a lifestyle that anyone wants. We show that it is possible to run the exact same economy that we have now, in the exact same way, and without money. Any government of any country can make smooth transition to MLE if it so desires and is not afraid of money power that exists today in our society. MLE will eliminate poverty, crime, corruption, and wars from the world. MLE will protect environment, human values, and bring true democracy to all countries. In a sense MLE will bring heaven on earth. We should understand that the money is free, like air, for the central bank, thus in one sense we have MLE now. Similarly the earth as given to us is also free. Thus all we need to implement MLE is to change our mindset. We need MLE for the evolution of the society to the next higher level. |
| Keywords: | Money; Laws of nature; Moneyless economy; Central bank |
| JEL: | E0 P0 K0 A1 |
| Date: | 2012–06–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:39763&r=mac |
| By: | Charles T. Carlstrom; Timothy S. Fuerst; Alberto Ortiz; Matthias Paustian |
| Abstract: | This paper addresses the positive implications of indexing risky debt to observable aggregate conditions. These issues are pursued within the context of the celebrated financial accelerator model of Bernanke, Gertler, and Gilchrist (1999). The principal conclusions include: (1) the estimated level of indexation is significant, (2) the business cycle properties of the model are significantly affected by this degree of indexation. |
| Keywords: | Business cycles |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwp:1216&r=mac |
| By: | Gabriella Legrenzi (Keele University, UK; CESifo, Germany; The Rimini Centre for Economic Analysis (RCEA), Italy); Costas Milas (Liverpool University, UK; The Rimini Centre for Economic Analysis (RCEA), Italy; Eranistis.eu, Greece) |
| Abstract: | We extend previous work on the sustainability of the government's intertemporal budget constraint by allowing for non-linear adjustment of the fiscal variables, conditional on (i) the sign of budgetary disequilibria and (ii) the phase of the economic cycle. Further, our endogenously estimated threshold for the non-linear adjustment is not fixed; instead it is allowed to vary over time and during financial crises. Our analysis presents particular interest within the current economic scenario of financial crises, poor growth and debt crises. Our empirical analysis, applied to the GIPS, shows evidence of a threshold behaviour for the GIPS, that only correct "large" unbalances, which, in the case of Greece and Portugal, are higher than the EGSP criteria. Financial crises further relax the threshold for adjustment: during financial crises, only "very large" budgetary unbalances are corrected. |
| Keywords: | debt sustainability, fiscal adjustment, nonlinear models |
| JEL: | H63 H20 H60 C22 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:rim:rimwps:54_12&r=mac |
| By: | Kilponen , Juha (Bank of Finland Research); Laakkonen, Helinä (Bank of Finland Research); Vilmunen, Jouko (Bank of Finland Research) |
| Abstract: | We study the effects of the ECB monetary policy and the European crisis resolution policies on the 10 year sovereign bond yields of seven European countries. We find that some of the decisions have had significant impact on sovereign bond yields and have succeeded in reducing stress in the financial markets. However, the impact of the same policy decision might have been positive for some countries while negative for others, suggesting that contagion effects may be important. The economically most significant effects on the bond yields have been due to the announcement of ECB's Securities Market Programme. |
| Keywords: | bond markets; policy effects; liquidity; European sovereign debt crisis; monetary policy |
| JEL: | E42 F34 G15 |
| Date: | 2012–06–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofrdp:2012_022&r=mac |
| By: | Carlos Hurtado |
| Abstract: | This policy brief reviews the experience of the countries under the Euro currency, focusing on those that have been under significant pressure in recent years— Greece, Ireland, Portugal and Spain, referred to as “emerging” economies. At first they experienced stable growth and converged to the most advanced countries, but subsequent adjustment has proven elusive due to macroeconomic conditions, worsening structural deficiencies, and incomplete integration. The conditions for the survival of the Euro zone are complex and still far from fulfillment. While Latin America has recently experienced a similar period of stable growth, there is no room for complacency. The main lesson from Europe’s experience is that Latin America must take advantage of the current context of growth, stability and optimism in order to carry out much-needed reforms that will leave countries adequately prepared to face a downturn in the world economy. |
| JEL: | E42 E61 E65 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:idb:wpaper:4786&r=mac |
| By: | Michael Plante; Nora Traum |
| Abstract: | We illustrate the theoretical relation among output, consumption, investment, and oil price volatility in a real business-cycle model. The model incorporates demand for oil by a firm, as an intermediate input, and by a household, used in conjunction with a durable good. We estimate a stochastic volatility process for the real price of oil over the period 1986–2011 and utilize the estimated process in a nonlinear approximation of the model. For realistic calibrations, an increase in oil price volatility produces a temporary decrease in durable spending, while precautionary savings motives lead investment and real GDP to rise. Irreversible capital and durable investment decisions do not overturn this result. |
| Keywords: | Time-series analysis ; Consumption (Economics) ; Capital investments ; Natural resources ; Energy consumption |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddwp:1201&r=mac |
| By: | Kelly, Bryan; Lustig, Hanno; van Nieuwerburgh, Stijn |
| Abstract: | We examine the pricing of financial crash insurance during the 2007-2009 financial crisis in U.S. option markets. A large amount of aggregate tail risk is missing from the price of financial sector crash insurance during the financial crisis. The difference in costs of out-of-the-money put options for individual banks, and puts on the financial sector index, increases fourfold from its pre-crisis 2003-2007 level. We provide evidence that a collective government guarantee for the financial sector, which lowers index put prices far more than those of individual banks, explains the divergence in the basket-index put spread. |
| Keywords: | financial crisis; government bailout; option pricing models; systemic risk; too-big-to-fail |
| JEL: | E44 E60 G12 G13 G18 G21 G28 H23 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9023&r=mac |
| By: | Alan K. Detmeister |
| Abstract: | Consumer price inflation excluding food and energy often performs worse than other measures of underlying inflation in out-of-sample tests of predicting future inflation or tracking an ex-post measure of underlying trend inflation. Nonetheless, inflation excluding food and energy remains popular for its simplicity and transparency. Would excluding different items improve performance while maintaining the simplicity and transparency? Unfortunately, probably not. Averaging across a series of tests suggests that knowing what items to exclude before seeing the data is problematic and excluding food and energy is not a bad ex-ante guess. However, ex-post it is not difficult to construct an index which performs considerably better than excluding food and energy. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2012-43&r=mac |
| By: | Michael D. Bordo; Joseph G. Haubrich |
| Abstract: | Do steep recoveries follow deep recessions? Does it matter if a credit crunch or banking panic accompanies the recession? Moreover, does it matter if the recession is associated with a housing bust? We look at the American historical experience in an attempt to answer these questions. The answers depend on the definition of a financial crisis and on how much of the recovery is considered. But in general recessions associated with financial crises are generally followed by rapid recoveries. We find three exceptions to this pattern: the recovery from the Great Contraction in the 1930s; the recovery after the recession of the early 1990s and the present recovery. The present recovery is strikingly more tepid than the 1990s. One factor we consider that may explain some of the slowness of this recovery is the moribund nature of residential investment, a variable that is usually a key predictor of recessions and recoveries. |
| Keywords: | Monetary policy ; Macroeconomics |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwp:1214&r=mac |
| By: | Lorena Caro; Arturo Galindo; Marcela Melendez |
| Abstract: | This paper explores the links between labor formality, access to credit and firm performance in Colombia using Annual Manufacturing Survey data for the period 2000-2009. A significant though small relationship is found between access to credit and informality. The results suggest that a 10 percent increase in the ratio of credit to sectoral output increases labor formality between 0. 76 and 1. 14 percentage points. This effect vanishes as a firm’s financial constraint increases. The paper also reports a strong correlation between labor formality and firm performance measured as output and employment growth. A one percentage point increase in labor formality is associated with an 8. 5 percent increase in output and an 11 percent increase in employment growth. |
| JEL: | E26 G21 O16 O4 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:idb:wpaper:4773&r=mac |
| By: | Gregory R. Duffee |
| Abstract: | This chapter discusses what the asset-pricing literature concludes about the forecastability of interest rates. It outlines forecasting methodologies implied by this literature, including dynamic, no-arbitrage term structure models and their macro-finance extensions. It also reviews the empirical evidence concerning the predictability of future yields on Treasury bonds and future excess returns to holding these bonds. In particular, it critically evaluates theory and evidence that variables other than current bond yields are useful in forecasting. |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:jhu:papers:599&r=mac |
| By: | Jose Romero (El Colegio de México) |
| Abstract: | The present paper estimate for Mexico coefficient pass-through of the type change on the general level of prices for three periods: 1980q1-1990q4; 1991q1-2000q4 and 2001q1-2011q4. From an empirical analysis, we quantify the evolution of the coefficient of short and long term as well as its process of adjustment over time. We find a drop in the coefficient of pass-through after the decade of the 1980s. However, the results do not suggest that the decline observed in the coefficient may be considered as permanent. If the level of the inflation rate and its persistence rise in the future, we will observe an increase in the value of the coefficient of pass-through, which in turn would give new impetus to inflationary pressures. These results lead us to conclude that the Bank of Mexico has control on the nominal exchange rate but not on the real exchange rate. |
| Keywords: | pass-through, inflation, exchange rate, real exchange rate, Bank of Mexico |
| JEL: | E31 E52 F41 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:emx:ceedoc:2012-13&r=mac |
| By: | Chiu, Adrian (Monetary Policy Committee Unit, Bank of England); Wieladek, Tomasz (Monetary Policy Committee Unit, Bank of England) |
| Abstract: | We study whether the accuracy of real-time estimates of the output gap produced by the OECD has improved over time by examining a panel dataset on real-time output gap revisions for 15 countries from 1991 Q1 — 2005 Q4. We use a simple panel data regression and a state space model, with common and country-specific factors, to assess whether the mean of the absolute value of output gap revisions has changed. We also apply a Mincer-Zarnowitz regression to determine whether the composition of measurement errors has shifted. Surprisingly, we do not find evidence that the size of output gap revisions has decreased over time; on the contrary, they seem to have increased. But the fraction of measurement errors due to omitted contemporaneous information has declined. This suggests that while the OECD’s accuracy in output gap measurement has failed to improve, its estimates are becoming less noisy. |
| Keywords: | Output gap; real-time data; dynamic common factor model |
| JEL: | E01 E32 |
| Date: | 2012–07–09 |
| URL: | http://d.repec.org/n?u=RePEc:mpc:wpaper:0036&r=mac |
| By: | Facundo Piguillem (EIEF); Alessandro Riboni (University of Montreal) |
| Abstract: | This paper studies legislative bargaining over redistribution in the context of a Neoclassical growth model where agents are heterogeneous in their initial capital. In each period, members of a legislature negotiate over the current capital tax. Tax revenues finance lump-sum redistribution. A key feature of the bargaining process is that the status quo is endogenous: the capital tax chosen in the current period becomes the default option in the next legislative session. We argue that the endogenous status quo serves a disciplinary role: policymakers may not propose (or accept) high taxes because doing so may improve, via a change of the status quo, the bargaining power of low wealth legislators in future sessions. We nd equilibrium capital taxes below 35% under dierent calibrations of the model. Finally, we analyze how redistribution and taxation vary as we change the distribution of agenda setting power, the distribution of wealth within the legislature, and institutional features of the bargaining protocol. |
| JEL: | E6 H0 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:eie:wpaper:1206&r=mac |
| By: | Alejandro Micco; Eric Parrado; Bernardita Piedrabuena; Alessandro Rebucci |
| Abstract: | The Chilean system of housing finance is a mixture of public and private elements that has arguably been very successful. This paper provides an up- to-date review of the main instruments, actors, and government policies of the Chilean system of housing finance. It concludes that, while the system is indeed functioning well, the increasingly important role of BancoEstado warrants further analysis of the role of public banks in a modern, fully developed housing finance system. |
| JEL: | E52 F33 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:idb:wpaper:4779&r=mac |
| By: | Chletsos, Michael; Roupakias, Stelios |
| Abstract: | This paper applies the “spatial correlations” methodology in order to investigate the impact of immigrants on the labor market performance of natives. We use information on 13 local labor markets for the period 1988-2008. The data are drawn from the Greek Labor Force Survey. We address the endogeneity of immigrants’ location choices by using an instrumental variables methodology. Our results provide empirical evidence that immigrants do not displace the indigenous workers. Also, there is evidence that: (i) medium skilled unemployment declines with immigration and (ii) labor force participation rises due to immigration. |
| Keywords: | immigration; unemployment; participation |
| JEL: | E24 J61 |
| Date: | 2012–07–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:39872&r=mac |
| By: | Rasmus Fatum (School of Business, University of Alberta); Yohei Yamamoto (Department of Economics, Hitotsubashi University) |
| Abstract: | We investigate whether foreign exchange intervention volume matters for the exchange rate effects of intervention. Our investigation employs daily data on Japanese interventions from April 1991 to April 2012 and time-series estimations, non-temporal threshold analysis, as well as binary choice models. We find that intervention volume matters for the effects of intervention, but only to the extent that the exchange rate effect per intervention unit is magnified in a linear sense by the larger intervention amount. This is a policy-relevant finding that also adds to our understanding of how intervention works. |
| Keywords: | Foreign Exchange Market Intervention; Intervention Volume |
| JEL: | E52 F31 G14 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:kud:epruwp:12-03&r=mac |