Strategic trade policy for Eastern Europe

The integration of the former state-trading countries into international free trade may, on the one hand, sensibly complement the reforms now under way towards their becoming market economies; on the other hand, this move harbours the risk of perpetuating and indeed aggravating the economic backwardness of those countries. The detrimental effects can be avoided if a product-cycle-oriented economic policy is pursued which makes a deliberate point of utilizing the relatively rich endowment of human capital available in these countries.     

How many Deutschmarks are held abroad?

The German currency is held and used abroad because of its liquidity and stability relative to most of the world’s currencies. DM banknotes are used as a transactions medium and as a store of value. The number of these which are held abroad is of interest to policy-makers for various reasons, but is rather difficult to estimate. Professor Seitz outlines the results of several estimation methods and discusses the monetary policy consequences.     

Adjustment costs and time-to-build in factor demand in the U.S. manufacturing industry

In order to explain cyclical behavior of factor demand, the static neoclassical model of the firm has been extended to include either adjustment costs (e.g. Lucas (1967)) or time-to-build considerations as in Kydland and Prescott (1982). This paper presents an intertemporal factor demand model which accounts for adjustment costs and gestation lags. The closed form solution of the model is a highly restricted vector ARMA-process that is estimated using quarterly data for the manufacturing industry in the U.S., 1960–1988. The main conclusion is that both sources of dynamics of factor demand are identifiable and found to be empirically of importance.     

Costs and benefits of EU enlargement

While the political benefits of the coming EU enlargement are relatively easy to identify, its economic and financial consequences are less unequivocal. The following article examines the likely costs and benefits of enlargement to both existing and future Members, and in particular how it will affect Germany, one of the few present EU Member States which has direct borders with acceding states. The article expresses the personal opinions of the author.     

The lucas supply function and the feasibility of monetary stabilization policy with rational expectations

Zusammenfassung Die vorliegende Arbeit untersucht die Effektivität systematischer (d. h. regelgebundener) Geldpolitik in einem makroökonomischen Modell mit einer Lucas-Angebotsfunktion, rationalen Erwartungen und asymmetrischer Information. InMcCallum (1980) wurde dieses Modell anhand der Methode der unbestimmten Koeffizienten gelöst und gezeigt, daß die Notenbank die Varianz des Outputs durch die Wahl des Politikparameters in einer einfachen Geldmengenregel (autoregressiver Prozeß erster Ordnung) beeinflussen kann. Die Auswirkungen von monetären Schocks können dabei zwar gedämpft, aber nicht vollständig eliminiert werden.In der vorliegenden Arbeit wird das Modell anhand der Methode der forward looking solutions gelöst und gezeigt, daß esunendlich viele Geldmengenregeln gibt, welche den Output von Geldangebots- und Güternachfrageschocksperfekt abschirmen. Produktivitätsschocks können hingegen nur kurzfristig neutralisiert werden.

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I am indebted to H. Frisch, Ch. Peutl, and unknown referees for their valuable comments and suggestions.     

Judgment aggregation: (im)possibility theorems

The aggregation of individual judgments over interrelated propositions is a newly arising field of social choice theory. I introduce several independence conditions on judgment aggregation rules, each of which protects against a specific type of manipulation by agenda setters or voters. I derive impossibility theorems whereby these independence conditions are incompatible with certain minimal requirements. Unlike earlier impossibility results, the main result here holds for any (non-trivial) agenda. However, independence conditions arguably undermine the logical structure of judgment aggregation. I therefore suggest restricting independence to “premises”, which leads to a generalised premise-based procedure. This procedure is proven to be possible if the premises are logically independent.     

Modelling of repairable systems with various degrees of repair

The availability of a stochastic repairable system depends on the failure behaviour and on repair strategies. In this paper, we deal with a general repair model for a system using auxiliary counting processes and corresponding intensities which include various degrees of repair (between minimal repair and perfect repair). For determining the model parameters we need estimators depending on failure times and repair times: maximum likelihood (ML) estimator and Bayes estimators are considered. Special results are obtained by the use of Weibull-type intensities and random observation times.