Can the facts of UK inflation persistence be explained by nominal rigidity?

It has been widely argued that inflation persistence since WWII has been widespread and durable and that it can only be accounted for by models with a high degree of nominal rigidity. We examine UK post-war data where after confirming previous studies' findings of varying persistence due to changing monetary regimes, we find that models with little nominal rigidity are best equipped to explain it.     

解析GDP增长率

GDP是人们生活中使用最频繁的一个统计指标,但存在对这个指标使用过度的现象,。本文首先从国民经济核算的角度在对GDP指标全面分析后认为：GDP有重大缺陷和偏差,GDP不能区别经济增长的数量和质量,GDP不能反映知识产出,GDP的增加只是一种手段,GDP的增加不能区别经济的表面增加和实际增加。必须正确理解、看待和使用以GDP表示的经济增长率,各级地方政府和部门可以不再计算GDP总量及其增长率,至少应该逐步淡化,盲目追求速度势必会造成宏微观出现反差的不正常现象。     

Vertical technology transfer and the welfare implications of patent protection

Significant amount of vertical technology transfer occurs between developed and developing-country firms, and many trading companies from developing countries create competition in the developed countries, yet the literature on intellectual property rights did not pay considerable attention to these aspects. In a Cournot oligopoly with vertical technology transfer, we show that patent protection in the developing country raises developed-country welfare if the following three conditions hold together: (i) patent protection in the developing country deters entry in the final goods market, (ii) the marginal cost difference between the incumbent and the entrant final goods sellers is sufficiently small, and (iii) the marginal cost difference between the incumbent and the entrant developing-country producers is sufficiently high. We also show that patent protection in the developing country always creates higher developing-country welfare if no developing-country firm enters the final goods market. We also discuss the implications of Bertrand competition on our results.     

Inflation targeting credibility and reputation: The consequences for the interest rate

The measurement of credibility and reputation is fundamental for the analysis of countries which adopted inflation targeting. Under this perspective, the objective of this article is to illustrate which measures of credibility and reputation are most useful in predicting variations of interest rates. Given a specific inflation target, this relationship is valuable for central bankers as well as for private agents trying to predict the central bank's policies. Due to the fact that Brazil represents a potential laboratory experiment in which the effects of an adoption of inflation targeting after more than a half decade can be observed, an analysis through several indices and its relation with the basic interest rate is made. The findings denote that the credibility indices based on reputation represent an alternative in the cases where the series of inflation expectation are not available. Furthermore, the empirical evidence confirms the hypothesis that higher credibility implies lower variations in the interest rate for controlling inflation.     

A reformulation of the foundations of welfare economics

Neoclassical welfare economics takes an outcome-oriented approach that uses Pareto optimality as its benchmark for welfare maximization. When one looks at the remarkable improvements in economic welfare that have characterized market economies, most of those improvements in welfare have been due to economic progress that has introduced new and improved goods and services into the economy, and innovations in production methods that have brought costs down, leading to higher real incomes. Pareto optimality is only peripherally related to actual economic welfare, and no economist would argue that people are materially better off today than a century ago because the economy is closer to Pareto optimality. After analyzing the actual factors that lead to improvements in welfare, this paper suggests a reformulation of the foundations of welfare economics to replace the almost irrelevant outcome-oriented concept of Pareto optimality as the benchmark for evaluating welfare with a process-oriented benchmark based on factors that generate economic progress. The paper then explores some implications of this reformulation.

The welfare cost of monopolistic competition: a quantitative assessment

This paper quantifies the welfare cost of monopolistic competition in a simple parametric class of endogenous growth models, embedding the neoclassical growth framework as a special case. We put particular emphasis on taking transitional dynamics into account. In doing so, we develop an original two-step numerical procedure to compute the value function. We find for conservative calibrations that the welfare cost of monopolistic competition can be anywhere between 0.4 and 1.2% of consumption, depending on whether labor is elastically or inelastically supplied.     

中国GDP增长与CPI:关系、均衡与“十二五”预期目标调控

通货膨胀率和经济增长率之间动态关系的认识是宏观调控的基础,然而,目前在线性和静态的分析框架内未能揭示出通货膨胀和经济增长的复杂动态关系。本文运用1996—2009年GDP增长率、CPI与M2增长率的季度数据建立我国经济增长与通货膨胀的非线性动力系统模型(GDP-CPINLDS),揭示了我国最优的季度GDP增长率和CPI,以及零通货膨胀的季度GDP增长率。总体上,我国经济增长与通货膨胀处在次优化的非均衡运行状态,两者呈现出同向性变动的特点。最优调控实验表明,仅调节M2增长率不能完全实现"十二五"调控目标。文章建议"十二五"期间要以调控GDP增长为导向,以从紧货币政策为基础,配合多种调控手段,形成强有力的联合调控机制,以确保GDP增长率和CPI目标的最优实现。     

Trend productivity growth and the government spending multiplier

The paper analyzes the effects of government spending shocks under alternative rates of trend growth in a New-Keynesian model characterized by price and wage rigidity. We show that the presence of trend growth makes the impact on output and consumption of government spending shocks smaller but more persistent with a hump shaped impulse response. Our results imply that the impact government spending multiplier decreases while the cumulative multiplier increases with trend growth.     

The role of exchange rate in inflation targeting: the case of Turkey

ABSTRACT

The role of the exchange rates in emerging market economies that have adopted inflation targeting (IT) is a critical and contentious issue in the relevant literature. This article investigates whether an exchange rate-augmented Taylor rule describes the Central Bank of Republic of Turkey’s (CBRT) monetary policy. Covering the period from 2002:1 to 2017:8 it also explores possible nonlinearities in the reaction function of the CBRT by employing a Threshold Vector Autoregressive (TVAR) model. The linear estimation of the model highlighted the importance of the exchange rate in monetary policy under IT. The results of the nonlinear model indicate that the stance of monetary policy was asymmetric with respect to exchange rate movements during the conventional IT period. However, the asymmetric monetary policy stance disappeared in the aftermath of the Global Financial Crisis. Increasing considerations of financial stability undermined the asymmetric policy stance of the CBRT in the post-crisis period.     

On the welfare costs of misspecified monetary policy objectives

This paper quantifies the effects on welfare of misspecified monetary policy objectives in a stylized DSGE model. We show that using inappropriate objectives generates relatively large welfare costs. When expressed in terms of ‘consumption equivalent’ units, these costs correspond to permanent decreases in steady-state consumption of up to two percent. The latter are generated by both the inappropriate choice of weights and the omission of variables. In particular, it is costly to assume an interest-rate smoothing incentive for central bankers when it is not socially optimal to do so. Finally, a parameter uncertainty decomposition indicates that uncertainty about the properties of markup shocks gives rise to the largest welfare costs.     

中国通货膨胀的福利成本研究

通货膨胀一直以来都是衡量一国宏观经济运行是否稳定和健康的重要指标。本文对国内外关于通货膨胀福利成本的研究发展进行了较为完整的综述,并在此基础之上运用消费者剩余方法和新古典宏观经济学一般均衡模型对中国通货膨胀的福利成本进行了计算和比较。实证结果说明,在中国高通货膨胀会带来较高的福利损失,因此将通胀率保持在较低的水平对提高中国的经济福利水平是有利的。     

浅析我国GDP增长中的风险因素

我国经济高速增长过程中存在许多问题，现行的GDP不能反映自然与环境之间的平衡，应将经济过程对资源环境的作用作为经济产出的投入加以核算，最终获得当期经资源环境因素调整之后的GDP，即绿色GDP。     

增长速度与增长转型:孰轻孰重?--关于中国GDP调增的冷思考

经过经济普查,2004年中国GDP调增16．8％。GDP调大虽然使一些比例关系得到优化并有利于今后的科学决策。但是,我们应该清醒地看到,GDP调大并不表示财富从天而降,更不意味着GDP制造过程中的诸多问题自动清零,调整增长战略、创新增长方式,应该成为我们最大的追求。     

Welfare implications of Calvo vs. Rotemberg-pricing assumptions

This paper compares the welfare implications of two widely used pricing assumptions in the New-Keynesian literature: Calvo-pricing vs. Rotemberg-pricing. We show that despite the strong similarities between the two assumptions to a first order of approximation, in general they might entail different welfare costs at higher order of approximation.     

An assessment of the Europe agreements’ effects on bilateral trade, GDP, and welfare

The so-called Europe Agreements had been enacted in the 1990s to initiate the integration of goods markets between the 15 EU incumbent economies as of 1995 and 10 potential entrants located in Central and Eastern Europe. This paper evaluates the trade, GDP, and welfare effects of these agreements by means of structural analysis of a bilateral trade flow model. The results support three conclusions. First, the agreements exerted significant positive effects on goods trade between the EU15 incumbents and the CEEC and, at the same time, they induced trade redirection from other countries. Second, EU15 GDP responded by an increase of much less than 1% while that in the 10 CEEC increased by several percent in response to the agreements. Third, the effects on welfare were moderate in the EU15 but amounted to more double-digit percentage changes in the involved CEEC.     

关于经济普查年度GDP核算的变化

与常规年度GDP核算相比,经济普查年度GDP核算发生了许多方面的变化,包括资料来源的变化、计算方法的变化、核算范围的变化、某些具体问题处理方法的变化、分类的变化等等。其中,资料来源的变化是最重要的变化,是导致GDP总量、结构和速度发生变化的最主要原因。     

The impact of artificial intelligence on economic growth and welfare

Focusing on the self-accumulation ability and the nonrival characteristic of artificial intelligence (AI), this paper develops a three-sector endogenous growth model and investigates the impact of the development of AI along the transitional dynamics path and the balanced growth path. The development of AI can increase economic growth along the transitional dynamics path, and can increase household short-run utility if an increase in the accumulation of AI is due to the rising productivity in the goods or AI sector, but can be detrimental to household short-run utility if an increase in the accumulation of AI is because firms use more AI to replace human labor. In addition, the development of AI is not necessarily beneficial to household welfare in the long run. The main results are unaffected when considering the case where AI can improve the accumulation of human capital, the traditional research and development model, and different kinds of physical capital.     

On the welfare implications of firing costs

This is a paper on the theory of institutions. It provides a rationale for the presence of firing costs in OECD countries based on a market failure that takes the form of an externality. Workers have firm-specific and industry-specific skills, and in each period there is a nonzero probability that a worker quits. The quitting probability makes the private discount rate (used by firms in making decisions about firing workers) higher than the social discount rate. This generates a “quitting externality”, where firms lay off too many workers in a recession. Firms are too quick to dispose of their human capital in a cyclical downturn because it is of less value to them than it is to society. State-mandated redundancy payments become a second-best remedy to overcome the market failure.