Public Opinion Distribution and Party Competition in US Trade Policy

Mass public opinion has generally been presumed to have little or no impact on American trade policy. I argue against this presumption. I assert that mass public opinion significantly affects US trade policy by shaping the way the two parties compete over that trade policy. When public opinion is unbalanced, the competition between the parties is likely to resemble a bidding war. When public opinion is balanced but split in a partisan manner the competition is likely to descend into Manichean conflict. When public opinion is balanced but split in a non‐partisan manner, the competition is likely to be characterised by political actors seeking to maintain the support of their core constituencies. To examine this relationship, I investigate three cases: the push to punish China over Tiananmen Square in 1989–90, the ratification of NAFTA in 1992–93 and the process through which President Bush was granted trade promotion authority in 2001–02.     

Japan's Fiscal Policies in the 1990s

This paper first summarises Japan's fiscal policies in the 1990s. Then, we investigate the macroeconomic impact of government debt and the sustainability problem. We find that the Keynesian fiscal policy in the 1990s was not effective and fiscal sustainability may therefore become a serious issue. We also estimate the optimal level of deficits and evaluate fiscal reconstruction movements. It is shown that the actual deficit exceeded the optimal level in the late 1990s. We then inspect fiscal reconstruction movements in the Hashimoto Administration in 1997 and find that the major factor of recession in 1997 was not fiscal consolidation. An important lesson from Japan's fiscal policies in the 1990s is that long‐run structural reform is more important than short‐run Keynesian policy.     

Policy uncertainty and the economic outlook

A large cloud of uncertainty hangs over the economic outlook, particularly the outlook for productivity growth and the long-term trend growth of output. This uncertainty stems from three sources: (a) the fiscal outlook, (b) the policy agenda shifting from campaign promises to partisan opportunity, and (c) the large reliance on executive branch actions. I discuss the foundations and likely evolution of policy uncertainty over the initial months of the Trump Administration.     

Do the magnitude and asymmetry of specific asset investments matter in the supplier–buyer relationship?

Abstract

Despite a body of literature on specific asset investments, the extant literature falls short of exploring the magnitude and symmetry of specific asset investments in supplier–buyer relationships. This paper builds on prior research to identify and examine the impact of total and asymmetric specific asset investments on commitment, trust, and conflict in supplier–buyer relationships. Covariance structure analysis is used to analyse survey data. The results show that total SAI are positively related to commitment and trust, while asymmetric SAI are negatively related to trust and positively related to conflict in supplier–buyer relationships. Decision-making uncertainty affects trust, commitment, and conflict more than any other variables. Therefore, firms should work to strengthen their relationships by increasing the magnitude of specific asset investments with the aim of increasing trust and commitment. We also discuss the limitations of this study and suggestions for future research.     

Transpacific Trade Imbalances: Causes and Cures

This paper explores the causes of the transpacific trade imbalances using an empirical global model. It also evaluates the impact of various policies to reduce these imbalances. We find the fundamental cause of trade imbalance since 1997 is changes in saving‐investment gaps, attributed to the surge of the US fiscal deficits and the decline of East Asia's private investment after the 1997 financial crisis. Our simulation results show that a revaluation of East Asia's exchange rates by 10 per cent (effectively a shift in monetary policy) cannot resolve the imbalances. We find East Asia's concerted efforts to stimulate aggregate demand can have significant impacts on trade balances globally, but the impact on the US trade balance is not large. US fiscal contraction is estimated to have large impacts on the US trade position overall and on the bilateral trade balances with East Asian economies. These results suggest that in order to improve the transpacific imbalance, macroeconomic adjustment will need to be made on both sides of the Pacific.     

财政赤字的排挤效应:实证分析

本文首先通过把财政收支引入居民消费函数,估计财政赤字对民间消费的影响;然后,分别从经济周期、全社会固定资产投资的资金来源以及资本收益率等角度,分析财政赤字对民间投资的影响.其结果均表明,1998年以来我国实施的积极财政政策所导致的财政赤字,并没有产生排挤效应.     

ASSET PRICES,OUTPUT AND MONETARY POLICY IN A SMALL OPEN ECONOMY

We formulate a macro‐model of a small open economy in order to investigate the relative performance of rules that respond to asset prices and those that do not. Our model consists of three asset prices: the stock price, the long‐term interest rate and the exchange rate. These asset prices interact with nominal wage and price Phillips curves, a law of motion for the labour share, a dynamic IS curve that describes output adjustment and a Taylor‐type interest rate policy rule. Estimations of the model show that policy rules that respond to asset price movements dominate rules that do not.     

构建推进社会主义新农村建设的财政保障机制

社会主义新农村建设需要与之相适应的财政体制作保障.本文以此立意,分析了1994年财政体制取向与新农村建设目标之间可能存在的冲突,评价了1998年以来财政政策性安排对于缓和农村矛盾、强化农村财政保障的积极作用,最后提出根据新农村建设要求,研究建立财政保障的长效机制的思路.     

1998年以来财政体制与政策的宏观评价

目前对于1998年以来积极财政政策的评价大都与经济运行的周期性波动相联系,缺乏与财政体制改革和经济转轨阶段性演进相联系的考察,而这两个被忽略的方面可能正好是影响积极财政政策效果的原因.本文试图从更宏观的视角分析五年来财政体制与政策的基本关系,并提出下一步财政改革与发展的政策建议.     

Managing an Economy Under EMU: The Case of Ireland

Ireland's experience of limited monetary independence within the EMS indicated that such independence was bought at the price of significant risk premia on interest rates. This experience informed its decision to join EMU, and membership has resulted in the expected credibility gain. Since the start of EMU inflation in consumer prices in Ireland has risen well above the EU average. However, this need not be a matter of concern within a monetary union. Instead, what should concern the Irish administration is a high rate of inflation in wage rates and domestic asset prices chiefly housing. While monetary policy is no longer available as an instrument of domestic policy, fiscal policy can still be used to effectively target these problems. The lessons of the first three years of membership is that the focus of fiscal policy within Ireland needs to change, and that the EU institutions also need to focus more clearly on the needs of the Euro area rather than on those of individual regional economies.     

Unzureichende Ausschöpfung der Realsteuern — das Beispiel Rheinland-Pfalz

In Germany, state and local authorities repeatedly come into conflict with one another regarding the funding of municipal budgets. The sufficient fiscal endowment of local public authorities depends not only on a satisfactory provision of state grants but also requires an adequate exhaustion of existing sources of revenues at the local government level. Against this background, the paper analyses local tax policy in order to assess whether the budget finance potential is being sufficiently exploited. Taking Rhineland-Palatinate as a case study, the degree of tax exploitation (local business tax, local property tax) is empirically estimated for the time period 2009 to 2015.     

财税政策不确定性的衡量——基于适应性学习预期的分析框架

我国财税政策重视短期矛盾调节而忽视长期稳定性,但鲜有研究论及财税政策不确定性问题,其中财税政策不确定性的衡量是重点也是难点。本文在适应性学习预期的分析框架下,对市场主体不同政策学习模式进行甄别,发现我国市场主体倾向于采取重视近期经验的持续性学习策略组成财税政策预期,并且政策预期不能向理性预期收敛,证明我国存在财税政策不确定性。然后,在此基础上构建相应指标来衡量我国财税政策不确定性程度。结果显示,由于财税政策规则不具备动态稳定性以及由此导致预期模式的不稳定,我国财税政策不确定性呈现内生性和系统性特征。本文进一步通过财税政策不确定性的宏观经济效应检验,发现其对生产、物价、出口等产生负面冲击,并且对生产导致符合经典理论的“超调”效应,在一定程度佐证了本文财税政策不确定性指标的一致性。最后,本文对治理财税政策不确定性提出相应政策建议。     

The relevance or otherwise of the central bank's balance sheet

This paper explores the impacts on an economy of a central bank changing the size and composition of its balance sheet. One of the ways in which such asset purchases could influence prices and demand is via portfolio balance effects. We develop and calibrate a simple OLG model in which risk-averse households hold money and bonds to insure against risk. Central bank asset purchases have the potential to affect households' choices by changing the composition and return of their asset portfolios. We find that the effect is weak, and that its size depends on how fiscal policy is conducted.That is not to say that the big expansion of central bank balance sheets in recent years has been ineffective. Our finding is rather that the portfolio balance channel evaluated in an environment of normally functioning (though nonetheless incomplete) asset markets is weak. That is not inconsistent with the evidence that large-scale asset purchases by central banks since 2008 have had significant effects, because those purchases were made when financial markets were, to varying extents, dysfunctional. Nonetheless our results are relevant to those purchases because they may be unwound in an environment where financial markets are no longer dysfunctional.     

An interest rate defense of a fixed exchange rate?

Defending a government's exchange-rate commitment with active interest rate policy is not an option in first-generation models of speculative attacks. In those models, the interest rate is the passive reflection of currency-depreciation expectations. In this paper, we show how to adapt the first-generation framework to allow for an interest rate defense. It is shown that increasing domestic currency interest rate before the attack makes domestic assets more attractive according to an asset substitution effect, but weakens the domestic currency by increasing the government's fiscal liabilities. As a result, an interest rate defense can be successful only conditional on sound fiscal policy.     

资产市场与周期性的财政风险

资产的价格波动与财政平衡之间关系密切。资产价格波动主要是通过收入、产出和财政援助三个渠道对财政账户产生影响的,并且这种影响随资产价格波动呈现非线性和非对称特征。本文结合典型案例,对资产价格波动对财政账户的影响进行了实证分析,并根据中国实际给出了政策含义。     

财政分权、空间溢出与经济增长

相关研究发现,邻省间存在明显的政策模仿和基础设施的空间溢出作用。而财政分权作为影响地方政府政策和基础设施建设的重要因素,也必然对经济增长具有较强的空间溢出作用。在经典财政分权模型的基础上,建立考虑空间相关的拓展模型,以此模型的结论为基础,利用中国大陆31个省份1998—2005年的面板数据进行空间计量分析,结果发现,我国的财政分权对经济增长有着显著的促进作用和空间溢出效应。     

Global Fiscal Adjustment and Trade Rebalancing

The emergence of substantial fiscal deficits and a large build up of government debt in major advanced economies will inevitably lead to a period of fiscal consolidation in coming years. In an earlier paper, Asian Economic Papers, 9, 2010 and 54, explored the effects of this fiscal adjustment in advanced economies on the global economic outlook. This paper focuses on the differences between the impacts of fiscal policy in advanced versus emerging economies. In particular, the need for more fiscal spending on infrastructure in emerging economies and the need for fiscal consolidation in advanced economies leads naturally to the question of what this asymmetric fiscal adjustment might do to global trade balances as well as global economic growth over the coming decades. The adjustment needed in both regions is substantial, and the asymmetry of the adjustment implies important consequences for trade and capital flows between regions as well as asset price adjustments within and between regions.     

Budget surpluses and social security reform: U.S. fiscal policy issues in 1998

In 1997 the US President and Congress concluded an agreement that imposed caps on discretionary government spending and which was expected to balance the budget by the year 2002. Just one year later the tide has turned: the fiscal year 1998 resulted in a US budget surplus for the first time since 1969. This article discusses the causes for this surprising development and the link between budget surpluses and Social Security's finances. It also relates some recent proposals on how to preserve the budget surplus for Social Security to the sustainability of fiscal policy.     

我国调控房地产价格的货币政策分析

美国由于对资产价格做出的货币政策滞后给经济带来了很大负面影响,我国也应该认识到积极的财政政策和货币政策会带来资产价格泡沫隐患,尤其是房地产泡沫问题应该受到关注。现阶段货币政策调控房地产市场面临着放松调控将导致房地产泡沫卷土重来,过度调控会阻碍经济的持续发展,微观主体预期对货币政策有效性构成挑战,基层中央银行落实政策难到住等问题。完善我国货币政策调控体系就要增强货币政策的连续性、一致性和透明度,防止心理预期的变化引起房地产价格的震荡,还要加强一般性货币政策与选择性货币政策之间的配合以及货币政策与其他调控政策的配合。     

Das leere Versprechen der aktiven Konjunktursteuerung

Since the financial crisis and the ensuing sluggish recovery, a growing number of voices have called for a more active role for fiscal policy to stimulate the economy. We reject this call and argue that in normal times, monetary policy and automatic stabilisers are sufficient to smooth the business cycle. The effectiveness of active fiscal policy is too uncertain and the requirements for a sensible adjustment are too high. Moreover, determining the state of the business cycle is almost impossible in real time. The benefits of active fiscal policy therefore do not outweigh its costs. Only in exceptional situations should policy makers consider active fiscal policy measures as an option.