The Global Market for Buses, 2000-2010

Business Economics - The global demand for autobuses reached the 286,000-unit mark in 2005 and should rise to 352,000 units by 2010. This represent s a growth rate of 4.2 percent compared to a rise...     

Nominal rigidity, desired markup variations, and real exchange rate persistence

This paper develops and estimates a dynamic general-equilibrium sticky-price model that accounts for real exchange rate persistence. The key feature of the model is the dependence of the firm's desired markup on its relative price. Desired markup variations exacerbate the nominal rigidity that results from the exogenously imposed frictions in the goods market. The model is estimated by the maximum-likelihood method using Canadian and U.S. data. The estimated model successfully replicates the properties of the Canada-U.S. bilateral real exchange rate. In particular, the model closely matches the persistence found in the real exchange rate series. More importantly, this is achieved with a plausible duration of price contracts and a moderate convexity of the demand function.     

Robustness and exchange rate volatility

This paper studies exchange rate volatility within the context of the monetary model of exchange rates. We assume that agents regard this model as merely a benchmark, or reference model, and attempt to construct forecasts that are robust to model misspecification. We show that revisions of robust forecasts are more volatile than revisions of nonrobust forecasts, and that empirically plausible concerns for model misspecification can explain observed exchange rate volatility. We also briefly discuss the implications of robust forecasts for a number of other exchange rate puzzles.     

China's exports,export tax rebates and exchange rate policy

This paper examines the relationship between China's exports, export tax rebates and exchange rate policy. It offers an explanation for why China's exports continued to rise under RMB real appreciations during the Asian financial crisis. Based on a traditional export demand model, we test our hypothesis that the counteracting effects of China's export tax rebate policy have diminished the effectiveness of real exchange rates in facilitating the resolution of trade imbalances under the current pegged exchange rate regime. We find evidence that RMB real appreciations during the crisis negatively affected China's exports, but the negative effects were mitigated by the positive effects of export tax rebates. We also find evidence of a long‐run relationship between China's exports and the other explanatory variables. The empirical evidence suggests that under the pegged exchange rate regime with limited adjustments, real exchange rate movements alone cannot resolve China's external imbalances. The policy implication of this study is that China needs to redirect its decades‐long export‐oriented development strategy to one that emphasises domestic demand‐oriented development and to replace the current pegged exchange rate regime with a market‐oriented more flexible exchange rate regime.     

The impact of foreign interest rates on the economy: The role of the exchange rate regime

It is often argued that many economies are affected by conditions in foreign countries. This paper explores the connection between interest rates in major industrial countries and annual real output growth in other countries. The results show that high foreign interest rates have a contractionary effect on annual real GDP growth in the domestic economy, but that this effect is centered on countries with fixed exchange rates. The paper then examines the potential channels through which major-country interest rates affect other economies. The effect of foreign interest rates on domestic interest rates is the most likely channel when compared with other possibilities, such as a trade effect.     

Segmented asset markets and optimal exchange rate regimes

This paper revisits the issue of the optimal exchange rate regime in a flexible price environment. The key innovation is that we analyze this question in the context of environments where only a fraction of agents participate in asset market transactions (i.e., asset markets are segmented). Under this friction alternative exchange rate regimes have different implications for real allocations in the economy. In the context of this environment we show that flexible exchange rates are optimal under monetary shocks and fixed exchange rates are optimal under real shocks.     

Exchange rate puzzles and distorted beliefs

We propose a new explanation for the foreign exchange forward-premium and delayed-overshooting puzzles. We show that both puzzles arise from a systematic distortion in investors' beliefs about the interest rate process. Accordingly, the forward premium is always a biased predictor of future depreciation; the bias can be so severe as to lead to negative coefficients in the ‘Fama’ regression. Delayed overshooting may or may not occur depending upon the persistence of interest rate innovations and the degree of misperception. We document empirically the extent of this distortion using survey data for G-7 countries against the U.S. and find that it is strong enough to account for these irregularities.     

Does the exchange rate regime matter for real shocks? Evidence from windstorms and earthquakes

Does the choice of exchange rate regime affect an economy's adjustment to real shocks? Exploiting the unpredictability and economic exogeniety of windstorms-hurricanes and typhoons-and earthquakes this paper assesses the often contrasting answers found in the theoretical literature. There is robust evidence that exchange rate flexibility helps an economy better adjust to real shocks. And consistent with the channels emphasized in the classic literature on exchange rates and shocks, differences in the behavior of the export sector help explain the different reactions between the two regimes.     

The Neglected Legacy of Lancashire Cotton: Industrial Clusters and the U.K. Outdoor Trade, 1960-1990

This article considers the neglected legacies of the Lancashirecotton industry and their impact on the U.K. outdoor trade.Studies of the decline of the Lancashire cotton industry afterthe Second World War have concentrated on the collapse of coarsecotton spinning and weaving, largely ignoring the impact ofthe knowledge and skills related to the finishing trades. Theexamination of the evolution of rainwear, coatings, and high-performancefabrics in the nineteenth century provides a backdrop to a studyof the innovation process that emerged in the U.K. outdoor tradeafter 1960. It shows that there was a path dependency betweenthe skills that resided in Lancashire’s finishing tradesand coating and fabric innovation for outdoor products. Thisarticle explores both the legacy and the ways in which the networksof innovation functioned as the U.K. outdoor trade expanded.     

Dimitry Anastakis. Auto Pact: Creating a Borderless North American Auto Industry, 1960-1971

For Canadians, the Canada-US Automotive Products Trade Agreement,or Auto Pact, is considered an icon of successful industrialpolicy. How did it evolve? Who were the players? What were theirmotivations? What was its impact? These are the central questionsfor which Dimitry Anastakis seeks answers in Auto Pact: Creatinga Borderless North American Automotive Industry. This book stems from Anastakis's 2001 PhD thesis, Auto Pact:Business and Diplomacy in the Creation of a Borderless NorthAmerican     

External adjustment in oil exporters: The role of fiscal policy and the exchange rate

After the decline in oil prices, many oil exporters face the need to improve their external balances. Special characteristics of oil exporters make the exchange rate an ineffective instrument for this purpose and give fiscal policy a sizeable role. These conclusions are supported by regression analysis of the determinants of the current account balance and of the trade balance. The results show little or no relationship with the exchange rate and, especially for the less diversified oil exporters, a strong relationship with the fiscal balance or government spending.     

The Design,Development and Implementation of Bank Licensing Policies and Procedures in Zambia (1980-2000)

Abstract

This study reviews the design, development and implementation of licensing policies in the years preceding the 1995-1997/98 bank failures in Zambia (1980-1994), and the licensing reforms that were followed thereafter (1995-2000). It documents important weaknesses in licensing practices that hindered regulatory effectiveness: inadequate minimum capital standards, insufficient ownership/management quality assessments, inadequate consideration of the convenience and needs of the financial sector and political interference in the licensing process. In addressing these and other weaknesses, however, the paper calls for research on prudential entry requirements to go beyond identifying desirable minimum requirements to establishing practical tools and techniques for regulators, especially for evaluating the quality of prospective bank owners and managers. It nevertheless cautions against adopting an overly cautious licensing policy, especially towards domestic banks as they provide valuable services to domestic economies.     

利率市场化与商业银行应对措施

利率市场化是我国金融深化的重要内容,亦是决定加入WTO后我国金融体系竞争力大小的一个重要因素。从理论和实践两方面分析了利率市场化对我国商业银行经营环境及经营管理的影响,并以此为基础提出了利率市场化过程中商业银行的具体对策。     

Espen Moe. Governance, Growth and Global Leadership: The Role of the State in Technological Progress, 1750-2000

There is a lot of literature on the relationship between technologicalchange, economic growth, and changing global leadership. Abramovitz(1989), on the side of economics, and Kindleberger (1996) andLandes (1969) as economic historians, showed how technologicalchange shapes economic, social, and global leadership, describingthe rise and fall of Venice, the Netherlands, the United Kingdom,and finally the United States as technological and politicalleaders in the world since the sixteenth century. In their view,the mechanism of this change was essentially     

Property Rights, Family, and Business Partnership in Nineteenth- and Twentieth-Century Brazil: The Case of the St. John d'el Rey Mining Company, 1834-1960

This article uses a case study to illustrate the dynamics offirm structure and property rights in Brazil during the nineteenthand twentieth centuries. The St. John d'el Rey Mining Companywas a British mining company in Brazil. Its experiences demonstratethat, property rights were not under-specified; they were over-specifiedand varying provisions for rights were mutually inconsistent.Precise laws protected capital investment to such an extentthat dissolving partnerships became problematic. At the sametime, inheritance laws mandated partible division of personalestates among heirs. The mining company's history demonstratesthe opportunities for posthumously emerged heirs, essentially,to claim partnership rights.     

British Public Policy and Multinationals during the "Dollar Gap" Era, 1945-1960

This article examines the role of British exchange and importcontrols in stimulating the dramatic increase in overseas (particularlyAmerican) multinationals in Britain from the end of the SecondWorld War to the late 1950s, together with the ways in whichthe government used controls to regulate the foreign directinvestment (FDI) inflow. Exchange controls were both an importantstimulus to inward investment and a powerful and flexible meansof regulating its volume and character. Government was relativelysuccessful in using these powers to maximize the dollar balanceand industrial benefits of FDI to Britain, given initially severedollar and capacity constraints, and in liberalizing policyonce these constraints receded and competition from other FDIhosts intensified.