THE IMPACT OF A NEW FEDERAL RESERVE CHAIRMAN

This paper treats appointing a Federal Reserve Chairman as a portfolio investment made by the United States President. It models Ronald Reagan's 1987 choice between Paul Volcker and other candidates as a trade-off between a potentially unfavorable short-term market response to replacing Volcker and various long-term political benefits from installing Reagan's own man. The paper discusses possible effects of Alan Greenspan's chairmanship on the trajectory of future monetary policy, on the Fed's preferences for financial reform, and on the Fed's corporate culture.     

THE POWER OF THE FEDERAL RESERVE CHAIR

This article examines the influence exerted by the Federal Reserve chair on monetary policy decisions. We construct a voting model where the chair selects the proposal that is initially put to a vote but is subject to an acceptance constraint that incorporates the preferences of the median Federal Open Market Committee (FOMC) member and the probability of counterproposals. The model is estimated by maximum likelihood using real-time data from FOMC meetings. Results for all chairs in our sample show that the chair's proposal is the result of a compromise, reflecting a stable balance of power within the FOMC.     

POLITICS AND THE FEDERAL RESERVE

Evidence presented here supports a two-part hypothesis that (1) the Federal Reserve is a powerful political entity, not independent of politics, and (2) it preserves its political power by carrying out the monetary policy desired by the President of the United States. This evidence includes the historical record from the Truman to Reagan administrations, politicization of Federal Reserve research, and political lobbying by the Federal Reserve. Formerly secret minutes of the regional Federal Reserve Banks' boards of directors meetings provide source material. The conclusion suggests a more efficient method of translating political signals and a rule for more predictable monetary policy.     

INSTITUTIONAL PRESERVATION AT THE FEDERAL RESERVE

This paper explains and presents supporting evidence for the hypothesis that institutional preservation is the central motive for Federal Reserve decision makers' behavior. Welfare maximization can, under certain conditions (i.e., via a vote maximization motive or the direct attribution of socially desirable goals), be a part of the preservation hypothesis, but it is inconsistent with substantial parts of Federal Reserve behavior. This paper presents evidence of this inconsistent behavior that the preservation hypothesis can explain. Such evidence includes opposing better coordination with voters'choices, creating an internally authorized fund that makes foreign loans without congressional authorization, opposing better monetary control procedures, organizing lobbying campaigns to defeat legislation to audit the Federal Reserve and make its meetings open to public scrutiny, failing to take minutes after legislation was enacted, and impairing information dispersal about funding for the Watergate burglars. The paper analyzes, in terms of institutional preservation, the results of recent research on the relationship of central banks' independence from short-run political forces and their anti-inflationary monetary policies.     

INFLATION ACCOUNTING FOR THE FEDERAL REPUBLIC OF GERMANY RESULTS USING DIFFERENT DEFLATOR PRICE INDICES

The purpose of inflation accounting as proposed by Jack Hibbert¹ is to show the changes in purchasing power of the assets and liabilities by sectors resulting from general price movements. This paper shows the results of inflation accounting for the Federal Republic of Germany on the basis of complete balance sheets for the sectors "Private households,""Enterprises,""General government" and "Rest of the world" in 1980. It is evident that the results of inflation accounting depend to a high degree on the kind of price index which is used as an indicator of the changes in the purchasing power of money in general. The price index for inflation accounting should in general be selected according to the aim of the analysis. On the other hand, however, the validity of the results of inflation accounting depends on and is limited by the price index chosen for that purpose. The figures presented also show that the results of inflation accounting depend to a high degree on whether estimates of the value of tangible assets are included or not. This holds for reproducible tangible assets as well as for land.     

PRICE ANALYSIS AND A SYSTEM OF PRICE STATISTICS

For some considerable time the interest in price statistics has mainly been focused on their use as "intermediate goods". The requirements of a system of price index numbers which have to be established in this connection are largely in the field of statistical coordination (integration of statistics on quantities, values and prices).
Recently the inflation problem has given rise to an increased interest in price statistics as "final goods". A meaningful analysis of inflation will devote attention to the relation between input prices and output prices. In this article several versions of an analysis of prices of final demand categories based on an ordinary Leontief input-output scheme are presented and the needs for price statistics are discussed. In fact a self-contained system of price statistics emerges from the price analysis.
There is a difference in the nature of the price index numbers required in compiling input-output tables in constant prices (Paasche) and that in the case of price analysis (Laspeyres). However the need for price observation runs largely parallel because in both cases the same detailed information on price developments will probably be used.
Price analysis gives the possibility of a step-by-step approach in building up a system of price index numbers.     

FARSIGHTED COALITIONAL STABILITY OF A PRICE LEADERSHIP CARTEL

This paper analyzes the farsighted behaviour of firms that form a dominant price leadership cartel. We consider stability concepts such as the farsighted core, the farsighted stable sets, and the largest consistent set. We show that: (i) the farsighted core is either an empty set or a singleton set of the grand cartel; (ii) any Pareto efficient cartel is itself a farsighted stable set; and (iii) the set of cartels in which fringe firms enjoy higher profits than the firms in the minimal Pareto efficient cartel is the largest consistent set.     

ADJUSTING NET WORTH FOR PRICE CHANGES WITH REFERENCE TO THE CANADIAN SYSTEM OF NATIONAL ACCOUNTS

This paper develops a rationale for a comprehensive measure of income and provides illustrative calculations within the Canadian System of National Accounts for making adjustments to net worth for price changes.
The paper notes that the System of National Accounts is designed to provide a number of individual aggregates measuring total production, income, savings and net worth. There is no single overall comprehensive measure which reflects the combined effect of changes in income and wealth. Such a measure is of particular importance in periods of rapid or extensive price changes which affect not only purchasing power of income but also the value of assets held and liabilities outstanding with consequences on net worth positions. This paper explores these issues and develops techniques for measuring the effects of specific and overall price changes with respect to net worth of the various sectors in the economy, illustrated with data from the integrated Canadian System of National Accounts.     

THE INTEGRATION OF A SYSTEM OF PRICE AND QUANTITY STATISTICS WITH DATA ON RELATED VARIABLES

This paper has two main points. First, the usefulness of the industry detail called for in the SNA would be increased if it were altered to facilitate the construction of price and quantity aggregates classified by stage-of-process sectors. Second, the price and quantity data so arranged should be augmented by data on behaviorally related variables classified the same way. The feasibility of the stage-of-process approach is demonstrated by a table showing the high degree to which the U.S. input-output table for 1967 can be triangularized. The analytical usefulness of the approach is demonstrated through analysis of changes in prices, output, unfilled orders and finished goods inventories for primary and for finished goods manufacturers.     

THE NEED TO REFORM THE FEDERAL DEPOSIT INSURANCE SYSTEM

The biggest financial disaster in modern history struck the savings and loan industry during the 1980s. This paper argues that the unifying cause of this debacle was the way in which the federal deposit insurance system is structured. The fundamental cause was not fraud and deregulation, as is commonly argued. The government not only permitted reportedly insolvent institutions to continue to operate, it permitted many such institutions to grow by offering relatively high rates on their deposits. Unfortunately, the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) of 1989 may not prevent a similar situation from ever recurring. Therefore, one must understand exactly what happened, what the FIRREA does and does not do, and the proposals for reforming the entire structure of the federal deposit insurance system.     

POLITICAL MONETARY CYCLES UNDER ALTERNATIVE INSTITUTIONS: THE INDEPENDENT TREASURY AND THE FEDERAL RESERVE

The theory of opportunistic political business cycles predicts incumbent politicians will alter their economic policies to spur short-run growth to attract additional votes for the upcoming election. There has not been much emphasis on the possibility of historical political business cycles prior to the Keynesian Revolution. No study has yet undertaken a systematic approach to testing for policy cycles during this period. Our study will bridge this gap by considering cycles in monetary policy for the periods of 1879–1914 until the start of Fed operations, and 1914–1932 until abandonment of the gold standard. To properly test for political cycles, it is necessary to develop reaction functions for the Treasury and compare against the reaction function later held by the Fed. This also reveals that creation of an independent monetary authority to be insulated from political pressures changed the manner in which policy was directed, aside from political issues. The evidence is not consistent, however, with monetary cycles closely tied to electoral concerns.     

基于产出模型的耕地价格评估方法

要实现耕地资源的可持续利用，需要建立耕地资源可持续利用的经济约束机制，而这种机制必须以耕地资源价值核算为基础。文章详细分析了耕地产出的影响因子，并针对具体情况，初步确立了适宜我国国情的耕地产出模型，提出了相应的耕地价格评估方法，同时以江苏省吴江市为例，对该方法进行了实际应用，并和他人的研究成果进行了比较，评述了本方法的优缺点。     

SUFFICIENCY OF THE LENS CONDITION FOR FACTOR PRICE EQUALIZATION

Abstract.  Demiroglu and Yun (1999 ) and Wong and Yun (2003 ) gave counterexamples to show that the lens condition is not sufficient for factor price equalization. However, they leave the following two important problems untouched: why the lens condition is not sufficient for factor price equalization in general; and whether counterexamples can be given only in a very special case. This paper extends these papers to a framework without two input vectors being proportional to explain why the lens condition loses sufficiency and gives a lot of counterexamples which include those provided in above papers as special cases.     

THE HYBRID PLAN: A PROPOSAL FOR FEDERAL CREDIT REFORM

Federal credit subsidies are one of the largest areas of government activity. However, the Unified Budget treats lending in a highly misleading manner, and federal credit management is inconsistent and deceptive. These oversights have contributed to both the rapid rise of federal lending and the financial crises facing several credit agencies during recent years. Credit reform is a vital issue both to protect the government's huge financial stake and to ensure the success of credit programs.
This paper critiques previous proposals for credit reform–each suffering from major implementation problems–and suggests an alternative. The Hybrid Plan combines aspects of earlier proposals and eliminates several disadvantages of each. One could implement the Hybrid Plan under current conditions, but it also is consistent with further improvement in federal credit management.