The aggregate supply of output and a constant price level

Summary When they are treating the case of an economy operating at less than full employment macro theorists commonly assume that the aggregate supply function for output is perfectly elastic with respect to the price level. In this paper we demonstrate that an aggregate supply of output which is perfectly elastic at some price level cannot be derived from the interaction of the demand for and supply of labor in a competitive market even when the labor supply conditions are Keynesian in nature - e.g., rigid money wage rates.     

The two-sided effect of financial globalization on output volatility

This paper provides evidence for a significant relation between international financial markets integration and output volatility. In the framework of a threshold model, it is empirically shown that this relation depends on the financial risk of a country as perceived by investors. In order to proxy financial risk, a financial risk rating employed by multinational firms, banks, and equity and currency traders is used. This rating relies on debt to GDP ratios amongst other indicators. In countries with low financial risk, financial openness decreases output volatility while financial openness increases output volatility in countries with high financial risk. Extensive robustness checks confirm this result.     

金融危机改变美国人生活

有一个中国老太太和美国老太太的故事曾广为流传,说的是中国老太太攒了一辈子钱,临死前终于住上了新房;美国老太太则先贷款买房,住了一辈子的新房。如今,不知道是中国老太太笑了,还是美国老太太哭了     

Seasonal money movements and the January effect

Many possible explanations have been suggested for the January effect, with tax considerations receiving the most attention. This analysis suggests a new explanation. The data show that money supply announcements during January contribute at least as much as tax considerations to explaining stock returns during the first five trading days in January. The seasonal behavior of money during December and January appears to be responsible for the money-supply-announcement effect. In addition, the end-of-year seasonal pattern of the money supply is present in other countries and was present before the adoption of personal taxes, so money supply announcements may offer a more consistent explanation of the January effect than tax considerations.     

市场趋利条件下的信贷资金马太效应分析

近年来信贷资金配给不断呈现结构马太效应,造成经济发展的局部不均衡和经济增长的结构性偏差,其主要原因是由于市场趋利作用,弱化了信贷资金政策调节公平的力度。本文通过对信贷资金马太效应不利影响进行了分析,提出了如何运用信贷政策手段平衡信贷结构,促进经济和谐发展的对策。     

Unanticipated money growth,output and unemployment in West Germany, 1964—1981

Zusammenfassung Unerwartete Erh?hung der Geldmenge sowie Produktion und Arbeitslosigkeit in Westdeutschland von 1964 bis 1981. — Dieser Aufsatz testet die Hypothese von der Wirkungslosigkeit politischer MaΒnahmen von Lucas-Sargent-Barro, wobei ein Vierteljahresmodell der westdeutschen Wirtschaft mit vier Gleichungen benutzt wird, die den Zeitraum 1964-1981 abdecken. Die erste Gleichung dient dazu, rationale Prognosen der Geldmengenexpansion abzuleiten; die Sch?tzfehler ergeben Sch?tzungen für die unerwartete Geldmengenerh?hung. Die Auswirkungen von erwartetem und nicht erwartetem Wachstum der Geldmenge auf “reale” Gr?Βen — BIP, Index der Industrieproduktion und Arbeitslosigkeit — werden untersucht. Das benutzte Sch?tzverfahren liefert konsistente und effiziente Sch?tzungen. Die Ergebnisse weisen deutlich auf die Existenz rationaler Erwartungen und struktureller Neutralit?t hin, d.h., nur die unerwartete Expansion der Geldmenge hat reale Wirkungen.

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Résumé Croissance inanticipée de la masse monétaire, production et chómage en Allemagne de l’Ouest 1964-1981. — Cet article examine l’évidence empirique de la ?proposition d’inefficacité politique? de Lucas-Sargent-Barro en appliquant un modèle trimestriel de quatre-équations pour l’Allemagne de l’Ouest de la période 1964-1981. La première équation est utilisée pour obtenir des estimations des prévisions rationnelles de la croissance monétaire; les erreurs de la fonction donnent des estimations de la croissance inanticipée de la masse monétaire. L’auteur analyse les effets de la croissance anticipée et inanticipée en masse monétaire sur les variables ?réelles?, c’est-á-dire, sur le PIB, l’indice de la production industrielle et le chómage. Il obtient des estimations consistantes et efficientes. Les résultats donnent une évidence forte pour des expectatives rationnelles et la ?neutralité structurelle?, c’est-á-dire, seule la croissance inanticipée en masse monétaire a des effets réels.

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Resumen Crecimiento monetario no anticipado, producción y desempleo en Alemania Occidental 1964-1981. — Este articulo examina la evidencia empfrica de la ?proposición de politica inefectiva? de Lucas-Sargent-Barro usando un modelo trimestral de cuatro ecuaciones de la economia de Alemania Occidental (cubriendo el periodo 1964-1981). La primera ecuación es utilizada para derivar estimaciones de pron?sticos racionales de crecimiento monetario; sus errores suministran estimaciones del crecimiento monetario no anticipado. El articulo examina el impacto del crecimiento monetario anticipado y no anticipado sobre las variables ?reaies? — Producto Bruto Interno, indice de producción industrial y desempleo. Se obtienen estimaciones consistentes y eficientes. Los resultados suministran una fuerte evidencia tanto para expectativas racionales como para ?neutralidad estructural? (p.ej., solo el crecimiento monetario no anticipado tiene efectos reales).

     

An aggregate model of output,inflation and interest rates for industrialised countries

Zusammenfassung Ein aggregiertes Modell für Produktion, Inflation und Zinss?tze der Industriel?nder. - In diesem Artikel wird ein ?konometrisches Modell für die Industriel?nder insgesamt mit Hilfe von j?hrlichen Daten aus der Nachkriegszeit gesch?tzt. Das Modell enth?lt Gleichungen für Bruttoinlandsprodukt, Inflation, Zinss?tze und Güterpreise (au\er ?lpreisen). Bruttoinlandsprodukt und sein Deflator spiegeln die Entwicklung von Angebot und Nachfrage wider, w?hrend die Rohstoffpreise positiv mit der Wirtschaftst?tigkeit und den realen ?lpreisen und negativ mit den Realzinsen variieren. Diese h?ngen ab von dem Angebot an und der Nachfrage nach Anlagekapital auf dem Weltkapitalmarkt, den Verm?gensumschichtungen sowie von der Wirtschaftst?tigkeit.

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Résumé Un modèle agrégé d’output, d’inflation et des taux d’intérêt pour des pays industrialisés. - L’auteur estime un modèle économétrique en utilisant des données annuelles agrégées de la période après-guerre pour des pays industrialisés. Le modèle inclut des équations pour le PIB, l’inflation, les taux d’intérêt et les prix des matières premières non-pétrole. Le PIB et l’inflation reflètent l’évolution de l’offre et de la demande agrégée pendant que les prix des matières premières varient directement avec l’activité économique et des prix réels pétroliers et inversement avec des taux d’intérêt réels. Les derniers variables dépendent de l’offre et de la demande des fonds disponibles pour avances à l’échelle mondiale aussi bien que des effects de la balance de portefeuille et de l’activité économique.

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Resumen Un modelo agregado de producto, inflación y tasas de interés para países industrializados. - Se estima un modelo econométrico utilizando datos anuales agregados del perfodo de la posguerra para países industrializados. El modelo incluye ecuaciones para el PBI, la inflaci’on, las tasas de interés y precios de materias primas exceptuando el petróleo. El PBI y la inflación reflejan la evolución de la oferta y la demanda agregadas, mientras que los precios de las materias primas siguen de manera directamente proporcional a la actividad econ?mica y al precio real del petróleo y de manera inversamente proporcional a las tasas de interés real. Estas últimas dependen de la oferta de crédito en el mercado mundial de capitales como también de efectos de ?portfolio balance? y de la actividad económica.

     

A simple accounting framework for the effect of resource misallocation on aggregate productivity

This paper develops a simple accounting framework that measures the effect of resource misallocation on aggregate productivity. This framework is based on a multi-sector equilibrium model with sector-specific frictions in the form of taxes on sectoral factor inputs. Our framework is flexible for the assumption on preferences or aggregate production functions. Moreover, this framework is consistent with that commonly used in productivity analysis. I apply this framework to measure the extent to which resource misallocation explains the difference in aggregate productivity across developed countries. I find that around 9 percentage points of the difference in the measured aggregate productivity between Japan and the US can be accounted for by resource misallocation. Using the framework, I also decompose the causes of the misallocation effect.     

The mystery of the money supply definition

Conclusion As we have shown, the validity of various definitions of money cannot be ascertained by means of a statistical correlation with national income. A valid definition can be established by following the essentialist approach—that is, by focusing on the distinguishing characteristics of an entity. Contrary to mainstream thinking, we have shown that the money supply definition remains intact, notwithstanding the deregulation of financial markets and the introduction of electronic means of payments.     

The demand for money in the Netherlands revisited

Summary This article presents an analysis of demand for money in The Netherlands, both at the aggregate level and the sectoral level. Special attention is devoted to the distinction between short and long run demand. Deviations of the long-run relationships are modelled by means of the error correction mechanism. The elasticities for aggregate demand are consistent with the findings for the money demand by the household and business sectors and correspond reasonably well with those derived from other studies. The estimated equations describe the rise in theM1- andM2-ratio in the 1980s in a satisfactory way, although forM2 from 1987 onwards there is a discrepancy between actual and fitted values. The disaggregated analysis shows that the behaviour of the business sector seems to be responsible for this.The authors are indebted to Professor S.K. Kuipers for his comments on an earlier draft.     

Is there a direct effect of money?: Money’s role in an estimated monetary business cycle model of the Japanese economy

In this paper, to study the alternative monetary transmission mechanism to the traditional interest rate channel which may even work under zero nominal interest rates, we estimate the monetary business cycle model of the Japanese economy that incorporates the direct role of money. Estimation is conducted on the system of equations in a state-space form via maximum likelihood estimation. We, however, find that the direct effect of money is extremely small in Japan. This finding is the same as those obtained for the U.S. in Ireland [Ireland, P., 2004. Money’s role in the monetary business cycle. Journal of Money, Credit and Banking 36, 969–984] and the Euro area in Andres et al. [Andres, J., Lopez-Salido, D., Valles, J., 2001. Money in an Estimated Business Cycle Model of the Euro area. Working Paper 121, Bank of Spain].     

The behavior of money demand in the Chinese hyperinflation

In this paper I study the behavior of money demand during the episode of hyperinflation that occurred in China after World War II. I consider two popular and competing money demand specifications – the log–log and the semi-log – and show that the log–log performs better than the semi-log in its ability to track the behavior of the money demand. The choice between the two specifications is of great importance, as it implies that welfare cost estimates are very different for hyperinflation. The findings also contribute to the understanding of Cagan’s paradox and the failure of Cagan inflationary finance models. The paradox might be attributable to the popular semi-log schedule for money demand, and the log–log schedule might be an appropriate form for the analysis of hyperinflation.     

The effect of institutional regime change within the new deal on industrial output and labor markets

Markets during the New Deal operated under a number of different institutional regimes, which were marked by executive orders, the passage of various pieces of legislation, and Supreme Court rulings on their constitutionality. Specifically, we break the New Deal period into the following six regimes: the Hundred Days, the President's Reemployment Agreement, the National Recovery Administration Codes of Fair Competition, the Schechter era, the National Labor Relations Act, and the Fair Labor Standards Act. Under these various regimes industrial markets were subject to different regulations relating to hourly wage rates, hours of work, the nature of competition, and unionization. Vector Autoregressive (VAR) regressions are run using a monthly panel of employment, weekly hours worked, wage rates, prices, and output for 11 major industries. We find that key policy and legal changes were associated with large and statistically significant movements in economic variables. Furthermore, changes in institutional regimes impacted different types of industries unevenly. For example, low-wage industries saw the largest increases in wages, and drops in output, after the mandated wage increases in 1933.     

The impact of income redistribution on aggregate consumption

Atlantic Economic Journal -