Symbiosis of monetary and fiscal policies in a monetary union

We consider the interaction between the monetary policy in a monetary union, and the separate fiscal policies of the member countries. We use a Barro–Gordon-type model extended to many countries and fiscal policies. Each country’s fiscal policies inflict externalities on other countries, and the common monetary policy has its time-consistency problem. But if the two types of policymakers agree about the ideal levels of output and inflation, then this ideal is attained despite disagreements about the weights of the objectives, despite ex post monetary accommodation to fiscal profligacy, without fiscal coordination, without monetary commitment, and for any order of moves.     

The interaction of monetary policies in a group of European countries

In this paper an analysis is made of the attempts by national monetary authorities to insulate the domestic money market from balance of payments developments. The problem is analyzed in the context of a multicountry model linking the monetary base of a number of European countries. The results indicate that the systematic use of sterilization policies by two or more countries leads to explosive reserve flows over time. At the same time it is found that the degree of monetary independence attainable by the use of these policies is negligible when used by all countries.     

A note on the stability of the interaction of monetary policies

This note presents further sufficient conditions for stability of monetary actions interconnected with nations' fixed exchange rates. The conditions enable one to infer qualitative effects on the stability of the degree of integration and of the sterilization coefficients adopted by individual monetary authorities.     

Inflation,uncertainty, and monetary policy

Low inflation likely reflects factors whose influence should fade over time. But many uncertainties attend this assessment, and downward pressures on inflation could prove to be unexpectedly persistent. My colleagues and I may have misjudged the strength of the labor market, the degree to which longer-run inflation expectations are consistent with our inflation objective, or even the fundamental forces driving inflation. In interpreting incoming data, we will need to stay alert to these possibilities and, in light of incoming information, adjust our views about inflation, the overall economy, and the stance of monetary policy best suited to promoting maximum employment and price stability. How should policy be formulated in the face of such significant uncertainties? In my view, it strengthens the case for a gradual pace of adjustment. But we should also be wary of moving too gradually. It would be imprudent to keep monetary policy on hold until inflation is back to 2%.     

Assigning television commercial videotapes to time slots under alternative message spacing policies

A number of studies in the psychological and marketing literature have focused on the effects of message spacing on consumer memory and judgement. The importance of message spacing has also been exemplified by a crucial scheduling problem in the broadcast television industry that requires the assignment of multiple airings of commercial videotapes to purchased slots of air time. Existing models for this problem are restricted to the case of equal spacing of successive airings in terms of slot position. In light of the fact that equal spacing of messages is not necessarily the best course of action in all situations, we present an alternative model that enables greater flexibility with respect to the spacing of commercial messages. For example, the model allows for equal temporal spacing of commercials in addition to equal spacing in terms of slot position. More importantly, the model permits spacing options that allow for pulsing strategies associated with well-separated bursts of commercial airings, as well as the consideration of spacing decisions when commercials have different durations. We demonstrate a heuristic for solving the scheduling problem under various message spacing policies. We believe that our model, which is effective and adaptable, has considerable promise for practical scheduling problems as well as subsequent experimental research.     

Basic needs,planning and policies

The recommendations of international organizations such as the World Bank, ILO, OECD and FAO and comparable demands by critical social scientists evince a growing awareness that basic human needs should be made the point of departure and orientation for analyses, planning and evaluation. They betoken a decisive turning away from the conventional growth- and employment-oriented economic policies towards a strategy which is determined by basic needs.     

From conventional to unconventional monetary policies: The failure of the market‐maker of last resort

This paper analyses the new role of market‐maker of last resort openly assumed by central banks since the 2008 financial crisis revealed the increasing impact of noninterest‐income activities on banks' balance sheets. A brief review of the distinction between conventional and unconventional monetary policies shows that the inflexion point from lender of last resort to market‐maker of last resort is given by the extension of central bank intervention to other markets than the bank reserves markets. Herein, it is explained how the market‐maker of last resort role is as counterproductive as its predecessor in putting the economy back on track. We show that the main problem of both conventional and unconventional monetary policies is that they distort price signals, particularly asset prices, in their attempt to reignite economic growth. Instead of correcting cyclical fluctuations, the policies of the market‐maker of last resort prevent the cyclical divergences between financial and goods sectors from readjusting.     

Firms' entry,monetary policy and the international business cycle

This paper proposes a two-country monetary model with firm entry as a means for alleviating the comovement puzzles in international business cycle models. It shows that business formation can generate fluctuations in output, employment, investment and trade flows close to those in the data while at the same time providing positive international comovements. Simulations show that the presence of imported investment goods is essential for replicating these facts.     

International trade policies,industrialization, and economic development

During the 1950s and 1960s, most developing nations, particularly the larger ones, strongly opted for a policy of import substitution industrialization (ISI). This was based on heavy protection and generally led to very inefficient industries. Since the early 1970s, an increasing number of developing countries deregulated their economies and liberalized trade, and this stimulated efficiency and growth. Some developing nations also tried strategic trade policies and to endogenize growth (as postulated by endogenous growth theory), but with only limited success. It seems impossible and inconsistent under the new international trade rules, however, for other developing countries to duplicate the East Asia “miracle,” which was based on strong government support for domestic industry while stimulating competition and efficiency among domestic firms. The successful completion of the Uruguay Round is expected to greatly benefit developing countries through continued deregulation and increased access to developed-country markets.     

Openness and optimal monetary policy

We show that the composition of international trade has important implications for the optimal volatility of the exchange rate, above and beyond the size of trade flows. Using an analytically tractable small open economy model, we characterize the impact of the trade composition on the policy trade-off and on the role played by the exchange rate in correcting for price misalignments. Contrary to models where openness can be summarized by the degree of home bias, we find that openness can be a poor proxy of the welfare impact of alternative monetary policies. Using input–output data for 25 countries we document substantial differences in the import and non-tradable content of final demand components, and in the role played by imported inputs in domestic production. The estimates are used in a richer small-open-economy DSGE model to quantify the loss from an exchange rate peg relative to the Ramsey policy conditional on the composition of imports. We find that the main determinant of the losses is the share of non-traded goods in final demand.     

Financial stability and monetary policy

Business Economics - Financial conditions should be an important component of the Fed’s monetary policy reaction function. I don’t think financial stability is a goal that really...     

贸易政策、非关税壁垒与环境保护

对外贸易政策主要是经济政策,它会直接对环境产品和服务贸易产生影响,这些政策主要是由原对外贸易经济合作部、国家进出口商品检验局负责制定与实施的。目前,中国与环境产品与服务有关的贸易政策大致可分为四类:第一类是与环境有关的进出口商品质量标准;第二类是在与世界各国贸易的交往中,因涉及产品的质量、环境和卫生标准问题而实施的法规和政策;第三类是根据我国参加国际公约和协定涉及环