Deficit financing,liquidity, and the government budget constraint

This article presents a macroeconomic model in which government deficits are bond financed and the stock of bonds may affect both expected income and liquidity. If either of these effects exists, then comparative statics analysis requires the government budget to be balanced. Temporary divergences from a balanced budget and changes in the maturity structure of the government debt may be analyzed in terms of changes in the stock of bonds. It is shown that traditional fiscal and monetary policies may have a perverse effect; that to ensure effective policy, deficit financing and open market operations should be avoided; and that only policies involving a balanced budget or the financing of deficits or surpluses through changes in the stock of money should be undertaken.     

Trends and cycles in Colombia's real GDP and fiscal deficit

The purpose of this paper is twofold. The first is methodological. We review the Beveridge-Nelson technique for decomposing economic time series, and illustrate its usefulness for examining the cyclical and secular movements in real GDP in Colombia. Second, we examine government expenditures and revenues in order to assess the extent to which the sharp increase in the fiscal deficit in the early 1980s should be viewed as a cyclical rather than a secular phenomenon.     

THE SOCIAL ACCOUNTS FROM A CONSUMER'S POINT OF VIEW

After a short introduction, the first part of this paper (section 3 through 9) provides an outline of the revisions proposed to the System of National Accounts (SNA) of the United Nations which are now under discussion. These proposals were considered by an expert group at the end of 1964 and were accepted by the Statistical Commission of the United Nations in 1965 as the basis for further work on the extension and revision of the SNA. The aim of the revision is to provide a fully integrated system of accounts and balance sheets in which input-output, flows-of-funds and sector balance sheets are incorporated in a generalised accounting framework. Whereas the real side of the economy has been studied analytically in many countries (input-output analysis, demand analysis and so on) much less experience is available on modelling the financial side of the economy, apart from econometric work on saving behaviour, which is fairly widespread. Accordingly, the second part of the paper (sections 10 through 14) contains a discussion of financial model-building in which a number of possibilities are explored. The final topic discussed (section 15) is demographic accounting, by which is meant a framework for recording and analysing human, as opposed to economic, flows and stocks. The development of such a system arose out of the emphasis placed by the expert group on the integration of demographic and economic information.     

Individual bidder behavior in first-price private value auctions

Individual bid functions display sensitivity to the strategic considerations inherent in first-price auctions. However, several formal models, including heterogeneous Nash equilibrium bidding models with constant relative risk aversion, perform quite poorly.     

Measuring market response to regulation of the cable TV industry

During the 1988–1990 period, the cable television industry was subject to a number of regulatory events. These centered on possible reregulation of rates for basic service and reduction of entry barriers for potential competitors. Using the event study methodology on a portfolio of cable firms, we find evidence that news of no reregulation caused significant positive abnormal returns. News of reregulation caused insignificant negative abnormal returns. These findings provide some support for the traditional consumer protection theory of regulation. News related to entry barriers generally had no significant effect on returns, which suggests that elements of natural monopoly may exist in the industry.