THE DYNAMIC PROPERTIES OF ALTERNATIVE ASSUMPTIONS ON PRICE ADJUSTMENT IN NEW KEYNESIAN MODELS

This paper presents a classification of the different new Phillips curves existing in the literature as a set of choices based on three assumptions: the choice of the structure of price adjustments (Calvo or Taylor), the presence of backward indexation and the type of price contracts (fixed prices or predetermined prices). The paper suggests study of the dynamic properties of each specification, following different monetary shocks on the growth rate of the money stock. We develop the analytical form of the price dynamics, and we display graphics for the responses of prices, output and inflation. We show that the choice made for each of the three assumptions has a strong influence on the dynamic properties. Notably, the choice of the price structure, while often considered as unimportant, is indeed the most influential choice concerning the dynamic responses of output and inflation.     

Anatomy is not destiny: A feminist analysis of the scholarship on women's leisure

Abstract

The extent of the scholarship on women has accelerated over the past 20 years, yet many questions remain unanswered concerning what is known about women and their leisure behavior. Social science research about women and leisure that analyzes the interaction between the environment and biological sex has aided in understanding leisure behavior more completely and has enabled researchers to conclude that anatomy is not destiny. An analysis focusing on the critical corrective, and transformative aspects of feminist research provides a way to examine the trends in research on women specifically concerning women and leisure. The purpose of this article is to examine the foundations of the emerging scholarship on women and leisure, especially the research on gender differences, from a feminist perspective. The emerging trends in feminist research and the “state of the art” concerning scholarship on women as it is occurring in other disciplines is examined in light of how research in other fields may offer guidance for leisure research.     

The Impact of Industrial Market Access Negotiations on African Economies

This paper proposes an extensive data simulation exercise on the likely impact of non-agricultural market access liberalization. The paper analyses real options for tariff cut reduction, special and differential treatment and the treatment of unbound tariffs. This paper also gives indications concerning the likely economic impact of this trade round of industrial market access negotiations on African economies. It shows that an ambitious tariff cut reduction formula would provide greater access to developed country markets for African producers. However, this kind of formula has a major drawback for African countries in the sense that it could accelerate the de-industrialization of African countries and limit incentives to diversify their economies.     

THE AGEING POPULATION: CRUNCH TIME FOR GOVERNMENT REFORMS

Current discussions about reforms to health and long‐term care miss the most important trends that should be influencing debate. With an ageing population that includes a higher proportion of people with manageable illnesses, health and care costs will rise. Reforms must ensure that existing government spending is used more efficiently and that it harnesses – rather than works against – private financing.     

Institutional Quality and Public Debt Accumulation: An Empirical Analysis

The question of public debt management for both developed and developing economies has generated an enormous amount of political as well as academic interest. This study examines how governance affects public debt accumulation in the MENA countries during the 1996–2015 period. The six Worldwide Governance indicators (voice and accountability, political stability and the absence of violence/terrorism, government effectiveness, regulatory quality, rule of law and control of corruption) were used to measure the quality of governance in these countries. The results show that only three governance indicators support well the hypothesis that poor governance leads to higher accumulation of MENA public debt. Moreover, the estimates suggest a significant indirect impact of bad governance operating via decreased GDP growth. These findings have important implications for policy makers of these countries, which are currently facing major fiscal and external imbalances due to the high cost of war and terrorist attacks, low oil prices and a decline in trade. Sound public debt management represents an urgent task especially that public debt management problems often find their origins in the lack of attention paid by policymakers to the costs of bad governance and weak macroeconomic management.     

Market Microstructure Empirical Regularities: Behavior of the Bid-Ask Spread and Closing Prices

A substantial number of last reported transactions for stocks trading on the New York Stock Exchange occur inside the quoted closing bid-ask spread. The tendency to close inside the spread results in price change magnitudes much smaller than those predicted from binomial models. Moreover, although the change magnitude is biased by the underlying trend of the market, the distribution of next day price change relatives is largely unaffected. The result is a systematic regularity between the location of today's close and tomorrow's close relative to the bid-ask spread.     

The European economy in an expanding world

Summary Postwar economic development in Europe can be subdivided in two periods. In the first subperiod 1950–1973 growth is determined by catching up vis-d-vis the US. The second subperiod 1973–1993 is characterised by a reorientation with respect to the international division of labour. This sets the stage for future developments, which are presented in the form of three different scenarios. In the European Decline scenario Europe cannot match developments in the US and Japan. As appears from a scenario called Fortress Europe import protection provides no sensible solution. To compete on a world scale Europe needs more technological dynamics as sketched in the European Recovery scenario. Calculations of future paths are based on the WorldScan model of the Central Planning Bureau.Theo van de Klundert is Professor of Economics at Tilburg University. Ben Geurts and Hans Timmer are staff members of the Central Planning Bureau, The Hague. We are indebted to Martin Fase and Simon Kuipers for useful comments on an earlier version of the paper.     

Is the Dutch consumer a true ricardian?

Summary In this paper the intertemporal optimization approach is adopted in order to estimate an empirical version of Blanchard's (1985) overlapping generations model. The observed sluggishness in consumption is incorporated into the model by recognizing both durability and habit formation as relevant determinants of total consumption. The model is estimated using quarterly data for The Netherlands from 1969:I to 1990:IV. The empirical estimates suggest that the status of the Dutch consumer as a true Ricardian is unambiguously rejected. The results furthermore suggest that this rejection is due to the existence of both liquidity constraints and finite planning horizons.Comments by Peter Broer, Jeroen Kremers, Debora Molenaar, Rick van der Ploeg, Frans Spinnewyn, Casper de Vries, Ed Westerhout and two anonymous referees are very much appreciated. Elbert Dijkgraaf has provided invaluable research assistance. We also thank participants of the OCFEB workshop and the CES seminar at the K.U. Leuven for their comments.