Internal and external transmissions of monetary and fiscal policies in the EMU

With the introduction of Economic and Monetary Union (EMU), the sovereignty of national monetary institutions has been replaced by a common monetary institution, the European Central Bank (ECB) and national currencies have been replaced by a common currency, the euro. EMU therefore implies the loss of national monetary policy autonomy and internal exchange rate flexibility inside the EMU area. However, external exchange rate adjustment, i.e. adjustment of the euro exchange rate, remains a feasible adjustment mechanism. This paper analyses how internal and external exchange rate flexibility affect macroeconomic adjustment in EMU and non-EMU countries. To do so, a model is constructed in which three countries interact: two countries that decide to form a monetary union and a third country that does not participate in the monetary union. Numerical simulations of a representative example are used to characterise the adjustment dynamics induced by monetary and fiscal policies before and after the start of the EMU.     

The role of banks in the monetary policy transmission in the new EU member states

This paper aims to enrich the knowledge on the monetary policy transmission mechanism in the new European Union member states with empirical evidence on the impact of monetary policy on bank lending. This work is based on individual bank balance sheet data and covers a sample of commercial banks from 10 Central and Eastern European countries over the period 1998–2006. We follow the approach suggested by Kashyap and Stein (1995) and control for cross-section heterogeneities among banks. The results indicate the existence of asymmetric adjustment of loan quantities with respect to specific bank characteristics. Our findings indicate the existence of a functioning bank-lending channel through small banks. This applies in the short-run to several, but not all, of the analysed banks.     

Alternative modes of deficit financing and endogneous monetary and fiscal policy in the U.S.A. 1923–1982

This paper first investigates the effects of alternative modes of deficit financing on the unemployment rate, the inflation rate and the real interest rate, within the framework of a small complete macroeconomic model. Secondly, it examines the nature of monetary and fiscal reaction functions. The two periods 1923–1960 and 1961–1982 are considered, with substantial differences in behaviour and policy being shown to exist between them. The most important conclusion is that long-run monetary neutrality properties shown to exist over the latter period are not intrinsic to the U.S. economy, but rather are the result of the stabilization policies being conducted over that period.     

Optimal fiscal and monetary policy with occasionally binding zero bound constraints

This paper studies optimal fiscal and monetary policy when the nominal interest rate is subject to the zero lower bound (ZLB) constraint in a stochastic New Keynesian economy. In the baseline model calibrated to match key features of the U.S. economy, it is optimal for the government to increase its spending when at the ZLB in the stochastic environment by about 60 percent more than it would in the deterministic environment. The presence of uncertainty creates a unique time-consistency problem if the steady state is inefficient. Although access to government spending policy increases welfare in the face of a large deflationary shock, it decreases welfare during normal times as the government reduces the nominal interest rate less aggressively before reaching the ZLB.     

The effects of foreign exchange and monetary policies in Russia

This paper examines the effects of Russian foreign exchange and monetary policies under conditions of abundant natural resources during the period 1999–2011 using structural VAR models. The results suggest that monetary policy shocks, which are identified as money supply disturbances, have a persistent effect on real output, and more than half of the volatility in real output can be explained by changes in the money supply. Furthermore, the analysis reveals that stock prices are a more significant transmission channel of monetary policy than bank loans.     

Spatially blind trade and fiscal impact policies and their impact on regional economies

The evidence for the US suggests that spatially blind policies often generate greater impacts on regional economic growth and development than policies specifically targeted at regions on regional issues generally. In this presentation, attention will be directed to two sets of national policies that have been promulgated without due consideration of their specific spatial (regional) impacts – trade policy and fiscal policy.Drawing on research conducted for the US, Japan and Brazil, an examination of trade policies will be presented, using the experience of NAFTA in North America and MERCOSUR in Brazil. Some further analysis of experience in Colombia will also provide insights into the role of national trade policy and, in the case of Colombia, fiscal decentralization policies. The second part of the presentation will examine fiscal policy impacts mediated through regional business cycles; the experience of Japan and the US will be examined.The results affirm the important implications that national (spatially blind) policies can have on regional economies; in the case of Brazil, trade policies have exacerbated already wide differentials in per capita income across states.     

积极发挥财政政策作用 着力推动经济高质量发展

习近平总书记指出,现阶段我国经济发展的基本特征,就是由高速增长阶段转向高质量发展阶段。这是全面建成小康社会的应有之义,也是建设社会主义现代化强国的必然要求。当前及今后一个时期,制定经济政策、实施宏观调控的根本要求,就是要推动高质量发展。     

Banking efficiency in South East Europe: Evidence for financial crises and the gap between new EU members and candidate countries

In this study we compare the cost efficiency of banks in ten South East European countries and find out how differences in efficiency are related to EU membership. The results reveal a statistically significant cost efficiency gap between EU and non-EU banking systems in the region, where on average EU banking systems tend to be more cost efficient than their non-EU counterparts. In contrast to other similar studies analyzing banking efficiency in South East European countries, we also run β-convergence and σ-convergence tests, as proposed in the literature. Based on these tests we can draw conclusions concerning the existence of a catching-up effect, since the detected cost efficiency gap is closing predominantly because of adjustments on the side of the less efficient banks. Additionally, we found that during the 2008 global financial crisis, the average cost efficiency scores of banks in the region improved, which could be explained by enhanced incentives of bank managers for intensified cost optimization in banks in crisis times. Our results suggest that the institutional adjustments in the non-EU countries should continue towards EU standards, as the EU banking systems tend to dominate in terms of measured cost efficiency.     

Company employment policies and new technology

Here the author presents case studies from a range of industries which illustrate the connection between new technology, and company personnel and manpower policies. Findings suggest that the form and direction of new technology is more likely to be affected by the company's employment policy rather than the reverse.     

The exchange rate pass-through in the new EU member states

This paper aims to complete our understanding of the relationship between changes in nominal effective exchange rates and prices in the new EU member states. I investigate the exchange rate pass-through to import, producer and consumer prices for ten Central and Eastern European countries with quarterly data from January 1996 to December 2011. In a first step, the pass-through estimates are derived from a dynamic panel data model through the generalized method of moments. A statistically significant exchange rate pass-through to consumer, producer and import prices is found, both in the short and long run. In a second step, I proceed to an individual analysis, country by country, and find support for an increased heterogeneity in the exchange rate pass-through estimates. In a third step, I assess the drivers of the estimated exchange rate pass-through coefficients and find support for a significant impact of exchange rate volatility, inflation volatility, import dependence, and the output gap, as well as the global outlook.     

Trade policies in Central Asia after EU enlargement and before Russian WTO accession: Regionalism and integration into the world economy

This paper analyses the choices between regionalism and multilateralism, and the impact of WTO membership on the five Central Asian countries. The two main sections analyse (1) why the large number of regional trade agreements signed by the Central Asian countries had little economic impact, and (2) the consequences for these countries of WTO accession. The Central Asian countries’ relationship to the WTO became more pressing after China's WTO accession in December 2001 and with imminent Russian accession. The push towards regionalism is also affected by external events, such as the introduction of the euro, and the EU's eastward expansion in 2004.     

International spillovers of (un)conventional monetary policy: The effect of the ECB and the US Fed on non-euro EU countries

We estimate a global vector autoregression model to examine the effects of euro area and US monetary policy stances, together with the effect of euro area consumer prices, on economic activity and prices in non-euro EU countries using monthly data from 2001-2016. Along with some standard macroeconomic variables, our model contains measures of the shadow monetary policy rate to address the zero lower bound and the implementation of unconventional monetary policy by the European Central Bank and the US Federal Reserve. We find that these monetary shocks have the expected qualitative effects but their magnitude differs across countries, with southeastern EU economies being less affected than their peers in Central Europe. Euro area monetary shocks have a greater effect than those that emanate from the US. We also find certain evidence that the effects of unconventional monetary policy measures are weaker than those of conventional measures. The spillovers of euro area price shocks to non-euro EU countries are limited, suggesting that the law of one price materializes slowly.     

The role of fiscal policy in the St. Louis model: An evaluation and some new evidence

This paper re-examines the role of high employment budget expenditures (fiscal policy) in the St. Louis expenditure equation by using spectral analysis and the spectral estimates of a two-sided distributed lag model. The analysis is undertaken with quarterly U.S. data from 1947:1 to 1984:IV in the rate of change form. A salient conclusion is that fiscal policy has statistically significant partial coherences with (nominal) income, with the latter leading the former over the business cycle. We find that income is jointly related to lead terms of fiscal policy in a two-sided distributed lag model. Some explanations for these results are provided.     

Sport as a cultural system: sports policies and (new) ethnicities in Lyon and Birmingham

‘Sport promotes integration’: this idea seems to be commonly accepted both in France and in the UK, even though the authorities in each country see the issue of ‘ethnic minorities’ very differently. This article draws on research based on interviews with the main actors of ‘socio–sports’ policies in the cities of Lyon and Birmingham and on analysis of consultation procedures and official documents, to show that sport provides a set of symbolic markers that helps the authorities, professionals and ‘ethnic minorities’ to get their bearings in an uncertain multicultural situation. Although ‘ethnic minorities’ try to control the direction of sports policies in pursuit of their own objectives, their strategies tend to be ‘routinized’ around markers legitimized by the authorities in response to the success of certain sporting practices. Sports policies, therefore, promote ‘security’ of identity for these ‘minorities’ by ‘mapping’ their environment using the values and principles of sport. ‘Le sport favorise l’int´gration’: cette idée semble communément admise en France et en Grande–Bretagne alors même que leurs autorités respectives envisagent de manière très différente la question des ‘minorités ethniques’. À partir d’une recherche fondée sur des entretiens avec les principaux acteurs des politiques ‘socio–sportives‘ des villes de Lyon et de Birmingham, et sur l’analyse des procédures de concertation et des documents officiels, l’analyse montre que le sport trace des repères symboliques qui permettent aux pouvoirs publics, aux professionnels et aux ‘minorités ethniques’ de s’orienter dans une réalité multiculturelle incertaine. Mais si ces dernières tentent de contrôler l’orientation des politiques sportives de manière à poursuivre leurs propres objectifs, leurs stratégies tendent également à se ‘routiniser’ autour des repères que les pouvoirs publics ont légitimé pour répondre au succès des pratiques sportives. Les politiques sportives favorisent dès lors la ‘sécurisation’ identitaire de ces ‘minorités’ en ‘cartographiant’ leur environnement à l’aide des valeurs et des principes du sport.     

Fiscal constraints and financial regulation in economic and monetary union

It is already well understood that economic and monetary union (EMU) will imply the centralisation of much of economic policy, including the setting of the euro interest rate and restrictions on the fiscal freedom of participating countries. In this article it is argued that fiscal harmonisation will go further than an obligation to adhere to the deficit limit of the'convergence criteria': It is also deduced that central control over the regulation of financial institutions will be necessary for EMU to function.