Shocks and the Viability of a Fixed Exchange Rate Commitment

The incentive to renege on a commitment to a fixed exchange rate is shown to be state contingent. A fixed exchange rate policy is not viable under unusual circumstances, and the incentive to violate the commitment is larger in the case of contractionary shocks than in the case of expansionary shocks. The possibility that the exchange rate regime is changed in unusual circumstances has significant effects also under normal circumstances, implying systematic devaluation expectations, excessive real wages and (ex post) real rates of interest, lower output and loss of reserves, which in turn reduces the incentive to initiate a fixed exchange rate policy. Moreover, policyshifts may be contagious among countries.     

Recente geschriften van J.-Ch. Snoy en M. Camps over de europese economische samenwerking

Jean-Charles Baron Snoy et d'Oppuers: Les Etapes de la Coopération Européenne et les Négociations relatives à une Zone de Libre Echange, Chronique de Politique Etrangére, Institut Royal des Relations Internationales, Brussel, september-november '59 (54 blz. plus 155 blz. bijlagen) La Négociation Européenne dans une Nouvelle Phase, Revue Générale Belge, Brussel, februari 1960 (18 blz.) Towards a European Solution, Lloyds Bank Review, London, juli 1960 (17 blz.)Miriam Camps: The Free Trade Area Negotiations, Occasional Paper No. 2, publication of Political and Economic Planning (PEP), Londen, april 1959 (51 blz.) Division in Europe, Occasional Paper No. 8, publications of PEP, Londen, juni 1960 (66 blz.) Britain, the Six and American Policy, Foreign Affairs, an American Quarterly Review, oktober 1960 (11 blz.) Four Approaches to the European Problem, Occasional Paper No. 12, publication of PEP, Londen, maart 1961 (26 blz.)     

De verantwoordelijkheid van de Staat als leningdebiteur met name in de onderontwikkelde gebieden

Het bovenstaande geeft de inhoud weer van een praeadvies uitgebracht voor het in september 1956 te Rome gehouden congres van het Institut International de Finances Publiques, gewijd aan Les effects économiques des dépenses publiques.     

Het N.V.-Recht En De Zelfstandigheid Van De Ondernemer

Naar aanleiding van het door de Dr. Wiardi Beckman Stichting in 1959 gepubliceerde rapport getiteld De hervorming van de onderneming.     

De Europese Economische Gemeenschap en de Minder Ontwikkelde Wereld Buiten de Geassocieerde Landen

Voordracht gehouden op 2 november 1963 te Amsterdam voor de postdoctorale leergang Externe economische betrekkingen van de E.E.G. De tekst is op enkele plaatsen bijgewerkt.     

Problemen van planning op middellange termijn,gezien uit het gezichtspunt van het bedrijfsleven

Voordracht gehouden op 7 november 1964 in het kader van een door de Nederlandse Economische Hoogeschool te Rotterdam georganiseerde post-doctorale leergang over het onderwerp Problemen met betrekking tot de planning op middellange termijn in Europa.     

Aantekeningen bij de nadere beschouwingen over het begrip monetair evenwicht van Professor Kreukniet

P. B. Kreukniet, Monetair evenwicht revisited,De Economist, CXII (1964), pp. 386–401.     

The economics of dying: A misapplication of tools

Conclusions Unlike McKenzie and Tullock, we do not know how personsshould treat their bodily organs or what is an ideal exit. That depends upon their utility goals, which are defined in output terms specific to the decision maker. We contend that the body is an input into the utility production process, and therefore, as with any input, it must be maintained and repaired at a level consistent with the output goals for maximization of utility. Thus, from this framework, it is quite consistent for a person to die with healthy organs without any thought of belief in reincarnation or the desire to bequeath one's bodily organs to others, or religious values. Self interest is all that must prevail.Also, the fact that there are interrelationships between the organs in the system, and at points these relationships take on fixed factor characteristics such that reduced levels of operation in one organ can create disorientation or coma or damage to other organs, means that the body cannot die as M-T suggest. Zero capacity for all organs at death is a technical impossibility as well as being inconsistent with the output goals of utility maximizers.     

Economische orde,economische politiek en sociale politiek

Naar aanleiding van een bundel opstellen van dr J. Zijlstra, Economische Orde en Economische Politiek, H. E. Stenfert Kroese N.V., Leiden 1956, 143 blz. en een bundel opstellen van dr G. M. J. Veldkamp, Economische Orde en Sociale Politiek, H. E. Stenfert Kroese N.V., Leiden 1957, 156 blz.     

A chaotic model of the exchange rate: The role of fundamentalists and chartists

A monetary model of the exchange rate is constructed in which fundamentalists and chartists interact. It is shown that the non-linearity of this speculative dynamics leads to chaotic motion of the exchange rate. The model is also capable of generating some of the stylized facts of exchange rate dynamics.     

Bijdrage tot de theorie van de commerciele prijspolitiek

Tweede lezing voor de Economische Faculteitsvereniging te Groningen, gehouden op 21 februari 1958. Zie voor de eerste lezing, Variaties op een thema van Böhm-Bawerk, De Economist, April 1957, blz. 292 e.v.     

The Applied Cointegration Analysis for the Open Economy: A Critical Review

Most applied cointegration investigations for the open macro economy rely on error correction models to infer causality, predictability, market efficiency, dominance, and market segmentation. The error correction model is well defined only when cointegration is due to simultaneous common factors. When common factors are not explicitly described as in a latent common factor model, however, error correction models are misspecified. Researchers should therefore be careful in using the error correction model for cointegrated time series to ensure that they are indeed generated from simultaneous common factor models. Analysts should investigate the exact nature of both long-run and short-run relationships by presenting a full-fledged simultaneous equations model. Without such an explicit simultaneous equations model, the presence of cointegration will only uncover the existence of a long-run relationship, but not causality, predictability, market efficiency, dominance, or market segmentation. A best practice will be prescribed for the proper use and interpretation of cointegration application.     

Returns to scale,imperfect competition and aggregate demand and trade policy effects in a two-country model

This paper constructs a simple general equilibrium two-country model with flexible exchange rates, specialization in production, and oligopolistic firms. The model is simulated in order to investigate how returns to scale and imperfect competition influence the process through which the aggregate demand and trade policy effects are transmitted internationally. The possibility that aggregate demand and trade policies enacted by one country can have beggar my neighbor effects on the other country cannot be excluded.     

Shall the New EU Members Introduce the Euro? Some Macroeconomic Policy Effects

After the EU enlargement in 2004, there is a clear commitment of the EU and the new member states to aim at an enlargement of the euro zone within the European Economic and Monetary Union (EMU) as well. This might have significant effects on the old EMU, the new members, and even on the global economy. The present paper analyzes some macroeconomic effects and particularly the impact on the effects of stabilization policies when switching to an enlarged euro zone under different assumptions about fiscal and monetary policy regimes in Europe and under alternative types of economic shocks. Also, the implications for the US of different European monetary regimes are evaluated. The results suggest that economic benefits for all countries are rather small. For the Central and Eastern European countries (CEECs), even disadvantages may dominate.     

Game equilibrium modelling

Summary Non-cooperative game theory has in recent years become one of the main tools in the social sciences and economics. It deals with decision problems of more than one (rational) player. The actions of those players result in outcomes that are the best that may have happened to a player, given the actions of the other players. This is precisely the content of the 'Nash equilibrium' concept. It would be nice when each game had a unique Nash equilibrium. Unfortunately, both non-existence and multiple equilibria occur. An important role in game theory is played by the information available to the players. Among the economic applications are: the Theory of Industrial Organisation, Bargaining and the Economic Theory of Information.Comments by Eric van Damme and Casper de Vries on an earlier draft of this paper have greatly improved the presentation. I have benefited from the comments of the editor and an anonymous referee ofDe Economist. For all omissions, all possible errors and the revealed views in this paper, I alone am responsible.     

Over inkomenspolitiek

Summary Incomes policy is defined as that part of government activities which is directly and wittingly engaged in the formation and the distribution of incomes. The results of such a policy are limited by market forces, but it is surely possible for the government to influence the distribution of earning capacities, the market system and the formation of incomes.The aims of incomes policy are twofold. Firstly, to achieve economic equilibrium,i.e., full employment, internal and external monetary equilibrium. Secondly, a more reasonable income distribution, which may be translated as: more equality on the condition that the national product (productive strains and savings) is not reduced too severely.Because other instruments are insufficient, incomes policy is indispensable to restrict inflationary pressures. If a more equal distribution is thought to be desirable, too, this kind of policy is necessary, because in peacetime automatic distributive changes are only very small.Incomes policy may be devided into three parts. Firstly (and most radically), the redistribution of earning factors and capacities, especially capital, market power and education. Secondly, measures with respect to factor payments, of which wages policy is an important part. Guidelines have proved not to be sufficient. Thirdly, income transfers, a typically welfare-state instrument of only limited importance.On these subjects a number of rather detailed proposals are made. It is stressed, however, that the definite choice of measures and priorities is a political one.Openbare les uitgesproken ter gelegenheid van de aanvaarding van ambt van lector in de economic aan de Rijksuniversiteit to Groningen op dinsdag 19 maart 1968.     

Transaction Cost Economics: How It Works; Where It is Headed

This paper begins with a sketch of the New Institutional Economics, with special emphasis on the institutional environment (North and others) and the institutions of governance (Coase and others). Thereafter the paper mainly emphasizes the applications of transaction cost economics to the study of governance, the object being to effect an economizing alignment between transactions, which differ in their attributes, and governance structures (firms, markets, hybrids, bureaus), which differ in their cost and competence. I raise a series of issues – phenomena of interest, describing human agents, describing firms, purposes served, scaling up – to which any would-be theory of the firm should be expected to speak and indicate how transaction cost economics responds to each. I thereafter describe the mechanisms through which transaction cost economics is implemented and develop some of the core conceptual supports out of which it works. Applications to public bureaus, strategic management, and intractable transactions are sketched.     

ECB Foreign Exchange Intervention and the EURO: Institutional Framework,News, and Intervention

Using a unique intervention news data set, this paper investigates the impact of ECB intervention and intervention-related news (newswire reports) on the Euro exchange rate. A time-series study of news generated by ECB officials and market participants regarding intervention and the value of the Euro as well as an event study of firm reports of ECB intervention is conducted. Both studies find significant short-run effects on the Euro value, while only negative statements (official statements denying past intervention or ruling out future intervention) appear to have persistent effects.     

Tax reform: Chasing the elusive dream

The paper provides a bird's-eye view of the long and arduous task of reforming the federal individual income tax. As a starting point for reviewing the major reforms, the authors evaluate Secretary Simon's criteria that underlie his contention that the tax system was badly in need of a thorough overhaul. Principles that should guide tax reforms are spelled out. Conflicts that arise with the application of these principles are highlighted. An examination of reform efforts in light of the principles and criteria set in the Treasury Department's Blue Prints for Tax Reform forms the basis for evaluating reforms enacted over the period 1978–2001. The review suggests that we are partway towards achieving the tax man's dream of equity, efficiency, and simplicity.The task of comprehensive reform is monumental in its dimension and far reaching in itspotential impact on our economic well-being.[William E. Simon, 1977, p. 11]     

Fundamentals,regime shifts,and dollar behavior in the 1980s

I provide an economic interpretation of the long swings of the dollar in the 1980s. I use the fully modified estimator method to analyze the long-run behavior of the dollar/sterling exchange rate over the period 1979–1989, detecting a structural shift in February–March 1985. In the 1979–1985 subperiod economic agents have reacted to a reduced set of fundamentals only, a finding that might corroborate the irrational behavior interpretation of the dollar upswing. In the 1985–1989 subperiod economic agents have associated the equilibrium value of the dollar with the behavior of a more balanced set of fundamentals.