Currency board and crawling peg

The Russian financial system is caught up in a vicious circle of lack of credibility, inflationary expectations and non-sustainability of the exchange rate, which is driving the country to the brink of disaster. This has revived the debate as to what would constitute an adequate exchange rate system. The following article examines the arguments for and against a currency board and a crawling peg, and concludes that a combination of the two would be the best strategy. The author is indebted to Friedrich L. Sell and the participants of the 45th International Atlantic Economic Conference in Rome, March 14–21, 1998, for valuable comments.     

Wechselkurse und Wirtschaftswachstum: ein nicht-linearer Zusammenhang?

Der Euro zeigt sich gegenüber dem Dollar anhaltend stark. Inwieweit wird die Konjunktur in Europa von der aktuellen St?rke der Gemeinschaftsw?hrung in Mitleidenschaft gezogen? Ist die Grenze erreicht, bei der eine weitere Verschlechterung der preislichen Wettbewerbsf?higkeit die deutsche Exportwirtschaft empfindlich treffen würde? Dr. Axel Jochem, 41, Frankfurt; PD Dr. Stefan Reitz, 43, ist Dozent an der Universit?t Gie?en.     

How Much Will It Cost to Join the Club? The Extra Costs of Approximating Lithuanian Environmental Laws with Those of the European Union

This paper presents estimates of costsassociated with approximating Lithuanianenvironmental protection legislation with thatof the European Union (EU). Lithuania is oneof twelve EU associate members in Central andEastern Europe that is currently preparing foraccession by approximating their legislationwith that of the EU. The costs of fifteen EUdirectives are considered and details are givenon four directives. Necessary investments maytotal Euro 1500 million by 2015 and the presentvalue of all annualized costs is expected to beabout Euro 2200 million. In 2015, annualized costsare estimated to be approximately Euro 500 million,but these costs are only part of the totalcosts of approximation. Non-environmentalcosts are not considered. Assuming a modestlyambitious average annual growth of GDP of 2.0%per year implies that approximation with thefifteen directives analyzed will cost roughly3.5% of GDP in 2015. This level of additional commitment to environmentalprotection is itself much higher than the 2.0%of GDP being spent on average by OECD countriesand suggests the possibility of a substantialeconomic burden on the Lithuanian economy. Public budgets and households are expected tocarry a substantial portion of this cost,because many directives are the responsibilityof national and local governments. Making theright choices that are expected to be part ofapproximation with the environmental acquis is likely to benefit from carefulcomparisons of costs and willingness to pay forthe environmental benefits of approximation.     

Ein Rollenmodell zur Einbindung der Endkunden in eine smarte Energiewelt

The successful expansion of renewable energies requires a phase of change in the energy supply system. On the one hand solutions have to be found to ensure the system dependability in spite of the high volatility of the feeding-in from renewable sources. On the other hand the differences between feeding-in and demand, which also occurs on the regional level evermore, have to be equalized on the regional level, too. For this purpose, it is necessary to develop new control and modified market mechanisms. The role definition of the involved actors gets an increasing relevance because of the politically predetermined unbundling. However, only a slight attention was paid to the role of the final consumers in the past. For a successful rebuilding of the energy supply system it is nevertheless important to involve the consumers in this process. It could be demonstrated within the research project “MeRegio”, that the integration of the consumers into an incentive based demand side management can tap significant potentials to equalize differences between feeding-in and demand. Therefore, the focusing on the final consumers can have an important contribution to rebuild the energy supply system.     

Improving Public High Schools: Evidence from New York

This study examined why differing public high schools have widely varying levels of student success. Two outcomes, namely the dropout and the college attendance rates, were analyzed using data for suburban schools just outside of New York City. While the dropout and college attendance rates proved most sensitive to community economic differences, they also responded to the way high schools were managed. Schools with smaller classes and less crime employing more experienced and qualified teachers enjoyed better outcomes. Teacher pay, however, was not a significant factor determining student success.      

Managed care and U.S. hospitals' capital costs

This study examined the effects of managed care organizations (MCOs) on the yields paid by U.S. hospitals on newly issued debt. The analysis improved on existing studies by utilizing a two-stage method that compensated for both simultaneity and self-selection effects. A reduced form probit analysis was first used to identify the factors determining whether hospitals in a random sample of 717 issued new debt in the study period (1995 and 1996). Bond yields were then analyzed using a second stage reduced form regression, incorporating selection effects, for the subset of 58 hospitals that had issued fixed rate debt. The results demonstrated that MCOs had only a modest positive influence on hospitals' costs of capital. Of greater import were insurance status, length of stay, and teaching status, with investors demanding greater yields for bonds issued without insurance and from hospitals with either longer lengths of stay or medical residency programs.