Is regional integration in the CFA zone sustainable?

This article aims to study the long-term sustainability of regional integration in the (Communauté Financière Africaine) CFA zone, based on the theory of the endogeneity of monetary zones. To this end, we consider trade and intra-CFA migration as the two quantitative vectors of regional integration. Using robust estimation techniques to overcome the endogeneity bias, our results show that integration in the CFA zone is moderately sustainable. More precisely, while the monetary unions of the CFA zone, in particular that of the WAEMU, contribute to reinforcing the intra-regional mobility of goods and people, they fail to induce strong synchronization of the macroeconomic cycles.     

Monetary policy, macroeconomic adjustment and currency speculation under floating exchange rates: the case of Bulgaria

This paper deals with the Bulgarian experience with exchange rate policy and the related macroeconomic adjustment in the transition period. It is argued that in the context of the Bulgarian macroeconomic environment, the exchange rate regime and the exchange rate policy (or the lack of such) did play a crucial role in determining the patterns of macroeconomic adjustment in this period. A simple general equilibrium model is suggested that provides some insights into the stylized performance of an economy under certain assumptions, similar to those characterizing the transitional state of the Bulgarian economy. Finally, some aspects of Bulgarian macroeconomic performance in recent years are analysed on the basis of the available empirical information and using the framework of the theoretical model. The paper concludes with the policy lessons of this experience.     

推行消费型增值税与当前宏观调控的协调性分析

我国实行消费型增值税的必要性已取得社会各界的广泛共识,税改基本已成定局。但2007年下半年以来的经济过热格局,促使12月的中央经济工作会议将防止经济转向过热和明显通胀作为2008年的调控目标。在如此背景之下,全面推行消费型增值税与宏观调控目标就出现若干矛盾。本文通过对各种宏观经济因素和消费型增值税的经济效应分析,指出两者矛盾的根源所在,并以此为基础提出构建两者协调关系的路径选择。     

A Model of Monetary Policy Shocks for Financial Crises and Normal Conditions

Deteriorating economic conditions in late 2008 led the Federal Reserve to lower the target federal funds rate to near zero, inject liquidity through novel facilities, and engage in large‐scale asset purchases. The combination of conventional and unconventional policy measures prevents using the effective federal funds rate to assess the effects of monetary policy beyond 2008. We employ a broad monetary aggregate to elicit the effects of monetary policy shocks both before and after 2008. Our estimates align well with major changes in the Fed's asset purchase programs and yield responses that are free from price, output, and liquidity puzzles that plague other approaches.     

Why Chinese Exports Face So Many Trade Remedy Actions: An Empirical Study Based on Multi‐country and Multi‐industry Data

This paper offers a comprehensive analysis of the reasons for the large number of trade remedy actions taken against China. Using a multi‐country and multi‐industry dataset, the present paper shows that the macroeconomic situation of China's partners has a great influence on the probability of trade frictions arising with China. Moreover, the more powerful the industry is, the more likely it is to take trade remedy actions against China. The empirical results reveal that China has been hurt under the operating mechanism of the WTO, and the number of free trade agreements is negatively related to the initiation and approval of trade remedy actions. Basically, the determinants for countervailing and double remedy measures are identical, while they are different from determinants of antidumping measures. Accordingly, strengthening communication with trade partners will alleviate friction between China and its trade partners. Meanwhile, making use of foreign lobbies' power, actively integrating into the international trading system and participating in regional trade agreements are effective ways for China to deal with the “new normal” of trade frictions.     

Galloping,creeping, or receding internationalization

Using a simple two-period linear durability choice trade model, we examine strategic trade policy in terms of taxes or subsidies levied on duopolistic firms in sales markets. In contrast to earlier parametric durability studies we show that the optimal export policy is not necessarily a tax when product durability is endogenously determined. Our analysis indicates that with endogenous adjustment of durability either a tax, subsidy, or laissez-faire policy (zero subsidy) may be optimal. In addition, we find that any trade policy (tax or subsidy) has the unforeseen effect of changing the firms' product durability. For example, future expected subsidies tend to decrease the domestic firm's product durability while increasing the foreign firm's chosen durability.     

欧盟对华贸易摩擦现状及对策探析——基于政府宏观视角

伴随着中欧经贸关系的发展，特别是在欧债危机的背景下，欧盟对华频繁使用反倾销、反补贴、技术性贸易壁垒的贸易救济措施，成为制约我国产品出口欧盟市场的羁绊。我国政府从宏观层面出发，通过开展经济外交、运用WTO争端解决机制等措施寻求贸易摩擦应对之道。     

A tale of two states: asymmetries in the UK small,value and momentum premiums

This article performs comparative analysis of the asymmetries in size, value and momentum premium and their macroeconomic determinants over the UK economic cycles, using Markov switching approach. We associate Markov switching regime 1 with economic upturn and regime 2 with economic downturn. We find clear evidence of cyclical variations in the three premiums, most notable being that in the size premium, which changes from positive in expansions to negative in recessions. Macroeconomic indicators prompting such cyclicality the most are variables that proxy credit market conditions, namely the interest rates, term structure and credit spread. Overall, macro factors tend to have more significant impact on the three premiums during economic downturns. The results are robust to the choice of information variable used in modelling transition probabilities of the two-stage Markov switching model. We show that exploiting cyclicality in premiums proves particularly profitable for portfolios featuring small cap stocks in recessions at a feasible level of transaction costs.     

Choice of exchange rate system and macroeconomic volatility of three Asian emerging economies

This study highlights the importance of choice of exchange rate system to macroeconomic stability of small-open emerging economies based on the outcomes of the recent exchange rate regime switches of three Asian countries – Indonesia, Malaysia, and Thailand. These countries have high similarities in their economic structures, but have reacted very differently in mitigating the economic distortion of the 1997 financial crisis, in particular in the adoption of exchange rate system. The empirical results of this study show that the amplified instability of macro-variables in Thailand and Indonesia, which was due to the crisis, were not stabilized by switching the exchange rate system to a flexible regime. The volatilities, however, were effectively stabilized after the countries made the second switch – from the independent float to the managed float with no pre-announcement. For Malaysia, a switch from the managed float to the pegged system successfully reduced the volatilities. The exchange rate misalignments of the countries, except Indonesia, were also reduced when the countries switched from a flexible to a more fixed managed float system. These empirical findings thus strongly support central banks of small-open emerging economies to adopt a more fixed, rather than a more flexible system. However, the managed float system needs to couple with efficient management to ensure a smooth and stable regime.     

Factors affecting profitability of multi-finance company in Indonesia

The aim of this study is to examine the profitabilily of multi-finance companies. This study uses macroeconomic determinants and fundamental variables as factors that affected profitability. The samples of the study was multifinance company in Indonesia over period 2005-2007. The study uses an unbalanced panel data as a methodology. The result suggests that, the ownership of financial assets doesn＇t significantly affect multi-finance performances. This result indicates that multi-finance face difficult situation to generate profit from the credit given. And the result also suggests that all macroeconomic determinants affect multi-finance profitability, with more concern on inflation that have negative significant.