Economic Uncertainty,Monetary Uncertainty,and the Demand for Money: Evidence From Asian Countries

In 1984 Nobel Lauriat Milton Friedman claimed that the decline in velocity of money or an increase in the demand for money was due to volatility of money supply. Another study argued that if monetary volatility could impact the demand for money, so can output volatility (as a measure of economic uncertainty). Both measures of uncertainty can cause people to reallocate their assets between cash and real assets that are less risky. If public become more cautious about the future, they will hold more cash today. However, if they chose to hedge against uncertain prices, they may hold more real assets and less cash. These two hypotheses are tested for Asian countries using bounds testing approach. While both measures are found to have short‐run significant effects on the demand for money in almost all countries, the short‐run effects last into the long run in half of the countries. Furthermore, we find positive and negative effects of both measures which are in line with previous research related to a few developed countries.     

Macroeconomic Synchronization Between G3 Countries

This paper studies the existence of a world business cycle by examining quarterly and annual comovements in production, prices and interest rates in the three main world economies: Germany, Japan and the US. In accordance with earlier studies, contemporaneous relationships clearly dominate short-term dynamics. The evidence indicates the existence of strong comovements in prices and long-term interest rates, and, to a lesser degree, in GDP and short-term interest rates. They are, however, rather unstable over time.     

Australian Macroeconomic Policy Experience*

This paper looks at Australian macroeconomic experience from approximately 1912 to 1985. The whole period is divided into five episodes. The idea in preparing this paper was to try to answer three questions namely: how did Australian experience differ from that of other OECD countries, what policy lessons could be learnt, and finally, what light could be shed on the relevance of various macroeconomic theories notably rational expectations. In fact. the questions have by no means been adequately answered though the paper goes furthest in dealing with the first question. I hope it will encourage further discussion and research¹ Anticipating some of the conclusions, the historical review suggests that Australian experiences have been fairly similar to those of other OECD countries. notably European countries. But the timing has sometimes differed the Australian wages explosions have been (more or less) exceptional and recently Australia has been special in having on incomes policy, It also appears that the theory of rational expectations does not get much support from Australian was behaviour, that policy from 1916 to 1981 was not really monetarist, and that fiscal expansions since 1982 have been made possible by the availability of the international capital market.     

Macroeconomic Uncertainty,Fund Demand and Corporate Investment

Using a unique set of data on fund use by China’s listed companies, this paper examines how macroeconomic uncertainty works on corporate investment. The study shows that macroeconomic uncertainty affects corporate investment behavior through the three channels of external demand, liquidity demand and long-term fund demand. However, the result is influenced by expectations and can differ across firms depending on their economic cycle, shareholder character, industrial character and the financial constraints they are exposed to. Specifically, high macroeconomic uncertainty can weaken the positive roles of these channels, especially those of external demand and liquidity demand, in driving corporate investment. During economic upturns, the effect of these channels is the most evident among state-owned firms, manufacturing firms and low cash dividend firms. The lessons from this study are that macroeconomic policies should be leveraged taking account of the channels through which economic shocks find their way, and monetary policies have to be implemented by targeting microscopic fund demand.     

On Macroeconomic Policy and Macroeconometric Models*

Macroeconometric models provide a formal and quantified framework that is an irreplaceable adjunct to the processes of policy thought. This article analyzes some recent developments in model structure and model use, and the interactions between them. Two major areas in which recent research has contributed to the ongoing process of model development are considered, namely the 'supply-side' approach to wages and unemployment, and the modelling of the exchange rate. An improved vehicle for macroeconomic policy analysis is an objective of such developments, and some issues surrounding the use of macroeconometric models in policy analysis are discussed     

货币政策不确定性、违约风险与宏观经济波动

本文首先测度了中国货币政策的不确定性,并从宏观总量层面检验了货币政策不确定性对于违约风险和实体经济活动的影响。进一步通过构建包含货币政策不确定性和风险冲击的非线性DSGE模型,使用带有随机波动率的货币政策规则刻画中国货币政策的不确定性,从理论上分析了货币政策不确定性冲击对违约风险和实体经济的影响。研究发现:(1)货币政策不确定性的增加会带来违约风险的上升和产出的下降。(2)当违约风险较高时,货币政策不确定性对于产出的负向冲击明显更强。本文的研究对于理解中国货币政策不确定性的经济效应,防范和化解金融风险,以更好地促进金融与实体经济的良性循环具有重要的政策含义。     

不确定性理论:现代宏观经济分析的基石

自李嘉图之后，经济学理论的构建遇到了两难的选择：经济分析只有排除不确定性和变动才能进行，而经济政策只有仔细考虑到不确定性和变动才有可能实行。凯恩斯的一个重要贡献就是将不确定性牢固地置于经济各阶段的中心，不确定的预期在消费、投资及货币需求三大心理规律起着决定性作用。在当今宏观经济学的演进过程中，对不确定性问题的态度和处理方式已成为划分诸多宏观分支理论的一把标尺，而在经济学层面对不确定性问题的深化，也是未来宏观经济学变革的一个重要方向。     

Argentina: Macroeconomic Crisis and Household Vulnerability*

Using panel data from the Argentine Permanent Household Survey, this paper analyzes which households were more vulnerable to the Argentine macroeconomic crisis during 1999–2002. Results suggest that the impact of the crisis was not uniform across households, which differed in their ability to cope with shocks. In particular, households with more children, and whose head was male, less educated, and employed in the private sector were the most vulnerable, suffering larger than average declines in income. Shocks to labor income were significant, with both unemployment rates and unemployment spells increasing throughout the period, particularly during the peak of the crisis towards the end of 2001. Individuals with low levels of human capital (proxied by education and experience), males, and self‐employed were more likely to lose their jobs. Public sector employees, in contrast, were more protected from the impact of the crisis on employment.     

Computer-Assisted Instruction and Student Performance in Macroeconomic Principles

Steven Cox reports on a research project in which computer-assisted instruction was tried at Arizona State University. He explains the experimental design which involved a comparison of student learning of macroeconomic principles by CAI with that of a control group. Fairly detailed accounts are given of the computer simulations Cox used. The statistical significance of nine student characteristics in terms of their impact on overall test performance is discussed. This article should have practical value to others doing research in this field.     

Trade and Real Wages: a Macroeconomic Model*

We offer a new paradigm to understand the effects of trade on factor rewards. It utilizes the classical‐Keynesian model, and shows that normally a country’s trade deficit hurts labor by lowering the real wage, but benefits the owners of capital. The effects of tariffs on factor rewards and employment are opposite to those of the trade deficit, which falls with a rise in the tariff rate. Countries with trade shortfalls unambiguously benefit from their tariffs, because laborers far outnumber capitalists, who suffer from the declining interest rate. Thus, tariffs lead to a rise in social welfare in trade‐deficit countries.     

潮涌现象与发展中国家宏观经济理论的重新构建

现有宏观经济学理论以产业升级时国民经济中每个企业对于下一个有前景的产业存在何处没有共识为暗含前提,但是,由于后发优势的存在,发展中国家的企业很容易对下一个有前景的产业产生共识,投资上出现“潮涌现象”,并伴随此现象出现产能过剩和相关的一系列问题。所以,有必要放松现有的暗含前提,重新构建一套新的宏观经济理论体系,探讨投资的“潮涌现象”对发展中国家的物价、就业、经济增长和周期波动的影响,作为政府制定财政、货币、金融、外贸、产业发展等宏观经济管理政策的参考。     

The Macroeconomic Consequences of Reciprocity in Labor Relations*

We develop and analyze a structural model of efficiency wages founded on reciprocity. Workers are assumed to face an explicit trade‐off between the disutility of providing effort and the psychological benefit of reciprocating the gift of a wage offer above some reference level. The model provides a rationale for rent sharing—a feature that is very much present in the data but absent from previous formulations of the efficiency wage hypothesis. This firm‐internal perspective on efficiency wages has potentially important macroeconomic consequences: rent‐sharing considerations promote wage rigidity, internal amplification and differential responses to technology and demand shocks.     

Financial Crisis and its Asymmetric Macroeconomic Impact on Eurozone Member Countries

The purpose of the paper is to analyze the dynamics of EMU (The Economic and Monetary Union, i.e., the group of European countries who use the common currency euro) and to analyze the fallout from the recent financial and economic dynamics. Both the impact on the eurozone as a whole and on individual member countries will be evaluated. The first 11 years of Eurozone experience will be discussed and evaluated in the second section. The third section will then be devoted to analyzing the fallout from the recent financial and economic dynamics. Both the impact on the eurozone as a whole and on individual member countries will be evaluated. The last section concludes and provides some ideas for future development of eurozone.     

Exchange Rate Volatility and Macroeconomic Performance in Hong Kong

The paper presents evidence on whether Hong Kong’s currency board arrangement, in place since 1983, has affected the volatility of real macroeconomic variables. Simple evidence on the relative volatilities of relevant macroeconomic variables before and after 1983 is presented, before a more formal econometric framework is utilized to examine the linkages between the exchange rate and the real economy. It is found that the currency board period has been one of relative stability in Hong Kong, though it has also been a period where external factors have been relatively benign. Even after controlling for the external environment, it is found that the currency board period is one of low macroeconomic volatility.     

Sales Contracts and Production Uncertainty*

The paper examines production under common uncertainty where sales contracts specify penalties for under- or over-production. We locate a trade-off between high productivity and the incurrence of penalties, and identify work incentives appropriate for different cases.