This book studies the causes and cures of inflation in a monetary union. It carefully discusses the effects of money growth and output growth on inflation. The focus is on producer inflation, currency depreciation and consumer inflation. For instance, what determines the rate of consumer inflation in Europe, and what in America? Moreover, what determines the rate of consumer inflation in Germany, and what in France? Further topics are real depreciation, nominal and real interest rates, the growth of nominal wages, the growth of producer real wages, and the growth of consumer real wages. Here productivity growth and labour growth play significant roles. Another important issue is target inflation and required money growth. A special feature of this book is the numerical estimation of shock and policy multipliers.

This study illuminates the characteristics of the Japanese economy and analyzes how and why they have been changing. It covers such areas as the Japanese firm, consumption and saving patterns, the labour market, financial markets, macroeconomic policies and international economic relations. The contributors to this 15-volume paper are all internationally-known and leading researchers of the Japanese economy. It gives a comprehensive coverage of both domestic and international aspects, with a detailed overview chapter by the editor, but is still easily accessible and useful for readers with only a basic background in economics.

Until recently, central bank independence was confined to just two major capitalist countries, the USA and Germany. As a result of stagflation and the voguish espousal of neo-liberalism in the 1980s, the institution has been adopted in most OECD and in many other countries. This book questions the principle of autonomy, examining the Bundesbank in historical context and exposing the flaws in both the technical and the political case for the wholesale adoption of the Bundesbank model by other states.

This book reflects the current state of discussion about agricultural and rural finance in developing and transition countries. It provides insight into specific themes, such as commodity value chains, farm banking and risk management in agricultural banking, structured finance, crop insurance, mobile banking and how to increase effectiveness in rural finance. Case studies illustrate various aspects of agricultural and rural finance in developing economies. The book is based on one of the yearly financial Sector Development Symposia held by the KfW Development Bank.

This book takes readers on a unique journey across some of the most debated implications of the rise of the Chinese economy on the global scene. From the analysis, suggestions emerge on how to improve statistical tools to measure performance and to obtain more precise macroeconomic forecasts. Moreover, it confirms the suspicion that a governance model of firms that does not sufficiently encourage market competition may have significant costs in terms ofefficiency for the Chinese production system. The analysis of demographic factors and of household savings gives further support to calls for a serious reform effort, particularly of the pension and health care systems, to utilize households' savings more efficiently and equitably. Finally the analyses of Chinese and global trade underscore the need for a less superficial consideration of the implications of the Chinese presence in global markets.
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Starting point of this book is the observation that an increase in public debt must be accompanied by a rise in the primary surplus of the government to guarantee sustainability of public debt. The book first elaborates on that principle from a theoretical point of view and then tests whether empirical evidence for that rule can be found. Additional tests are implemented to gain further evidence on sustainability of public debt. In order to allow for time varying coefficients penalized spline estimations are performed. The theoretical chapters present endogenous growth models and assume that the primary surplus rises as public debt increases so that sustainability of public debt is given. Implications of public deficits and debt are studied assuming full employment and for unemployment. The conclusion summarizes the findings and compares the results of the different models. Finally, policy implications are given showing how governments should deal with high public debt to GDP ratios.

Investment provides an examination of the key macroeconomic theories which underpin fixed asset investment. It would make ideal reading for an intermediate level macroeconomics course or a module on fixed asset investment taking an applied macroeconomic perspective.

ical) and to self-fulfilling currency crisis, respectively. Research stressing the former approach was pioneered by Krugman (1979) and Flood and Garber (1984). According to this line of research, the failure of governments to adopt domestic monetary and fiscal policies consistent with their stated exchange rate targets leads to a gradual diminution of reserves and eventually a stock adjustment that depletes reserves suddenly in one attack (Sachs, Tornell, and Velasco, 1996, page 47). The result is either a devaluation of the exchange rate or a switch to floating. Subsequent work of this genre has specified a number of other channels, in addition to that involving inconsistent and unsustainable monetary and fiscal policies, that can precipitate an attack: 1. Inconsistency between external and internal objectives. The stances of monetary and fiscal policies may be consistent with the authorities' exchange rate target, but domestic economic indicators (such as the unemployment rate) may be inconsistent with internal balance, resulting in pressures on the authorities to relax macroeconomic policies. Private agents, aware of this inconsistency, perceive an opportunity for profits from a currency devaluation and precipitate an attack. 2. Contagion effects. Prior to an attack on another currency (say that of country B), the market may view a country's (say, country A's) exchange rate as consistent with economic fundamentals and, thus, sustainable.

Developing countries' financial sector has been affected by a troubled macroeconomic environment and repressive policies. To improve their financial sector performance, some governments have responded with financial reform policies which have succeeded in only a few but failed in several countries. This book identifies the challenges and solutions for policymakers and financial managers in countries implementing financial reform policies. It analyzes the anatomy of success and failure of reform and argues for sound financial regulation and supervision in these countries.

South Korea's path toward a higher quality of life has been a dynamic process, Suh shows, shaped by historical contingencies, some immutable logic of capitalist development, and a dialectical relationship between the state and Korean civil society. Debunking the illusion of democracy and myths of self-regulating capitalism in South Korea, Suh shows that a growth machine is not a panacea for the development of human beings and their quality of life. If instead the raison d'etre of quality of life depended upon a robust civil society operating under fair rules of the game by the state, the developmental road would be more promising.

Suh seeks to test the hypothesis that the rising tide of economic growth will raise all boats in the Korean sea, remapping its structural pressure points which have been submerged at high tide. Given the high levels of economic growth generated by state intervention, any demand of distributive justice necessitates egailitarian reforms. As Suh shows, the present South Korean situation goes straight to the heart of theoretical questions about the enduring structures of capitalism, and its promise to improve average living standards and to link the redistribution of economic rewards to enhanced economic performance of the system as a whole.

South Korea's path to quality of life has been a dynamic process, Suh shows, determined by historical contingencies, with some immutable logic of capitalist development, and a dialectical relationship between the state and Korean civil society. A study of particular interest to scholars, researchers, and policy makers concerned with political economy and social-economic development and East Asian Studies.

This volume consists of a number of papers related to the theme of the dynamics of inequality and poverty. These are subdivided into four separate parts.

The five chapters in Part I of this volume are concerned with inequality and poverty over extended time periods. Bandyopadhyay and Cowell deal with the concept of vulnerability in the context of income mobility of the poor. Biewen studies the extent and the composition of chronic poverty in Germany, comparing the results with the United Kingdom and the United States. Van de Ven describes a dynamic microsimulation model of cohort labour earnings based on the Australian population aged between 20 and 55 years, and considers how the widening social gap between the Australia and the UK is reflected by their redistributive systems, through the use of static and dynamic microsimulation. Kelly analyses the lifetime distribution of net worth in Australia using a dynamic microsimulation model to project the cross-sectional and lifetime asset holdings of a 5-year birth cohort over a period of 40 years.

In Part II, the issue of intergenerational transfers of poverty is considered. Corak compares generational earnings mobility and the reasons for the degree to which the long run labour market success of children is related to that of their parents across countries. He provides a framework for understanding the underlying causal process as well as the conception of equality of opportunity, as a guide for public policy.. Grawe uses data from the British National Childhood Development Study to examine the quality-quantity trade-off in fertility in multiple measures of child achievement. Maani examines the link between parental incomeand other resources during adolescent years, and higher education choices of the offspring at age 18, using a recent longitudinal data set from New Zealand.

Part III is concerned with inequality over time. First, Wolff examines US inequality since the late 1940s, investigating the role of computer investment, dispersion of schooling and unionisation rate in the rise in inequality between 1968 and 2000. Second, Chotikapanich and Griffiths consider the question of testing for dominance in income distributions through the development of Bayesian methods of inference, which report on changes in income distributions in terms of the posterior probabilities. This allows an assessment of whether income distributions have changed over time.

The final part of this volume is concerned with measurement issues. Makdissi and Wodon propose a measure of extreme poverty which is multidimensional in nature. It recognises the fact that there are interaction effects between different deprivations and that the length of time during which deprivations are felt may have a negative impact on household well-being. In the final contribution, Cowell examines Theil's approach to the measurement of inequality in the context of subsequent developments over recent decades.
*Focuses on the dynamics of inequality and poverty
*Examines inequality and poverty over time, the intergenerational transfer of poverty, inequality over time, and measurement issues
*Chapters discuss inequality and poverty in developed countries around the world, providing a mulitnational perspective

The CFA Franc Zone in West and Central Africa represents the largest monetary union in the southern hemisphere, predating the European Monetary Union by decades. This book analyzes the recent economic experiences of the Franc Zone's member states and of its economic institutions. It pays particular attention to the way this disparate group of countries exploit the advantages and manage the costs of adhering to a single currency. It also analyzes the impact Franc Zone institutions have on poverty.

This book brings together articles by international political economists on Keynesian economics and its legacy. The book begins with Don Patinkin's assessment of Keynes' early life and focuses attention on Keynes' contribution to monetary economics. Among the many controversies surrounding "The general theory", Axel Leijonhufvud takes the view that the Keynesian revolution began and stayed on the wrong track.;Leland Yeager refutes the idea that Keynesian economics was responsible for the general prosperity in the indusrialized world immediately after the Second World War. Although Karl Brunner is not fundamentally against Keynes' methodological approach, he is critical of his reliance on fiscal rather than monetary policy. Whereas Terence Hutchison defends Keynes, both against his critics but also against Keynesians, and argues that Keynes would not have shared their interpretation of his work on fundamental grounds. Patrick Minford traces the roots of neoclassical economics, based on the concept of rational expectations, back to "the general theory". In the final chapter, Stephen Littlechild offers an alternative to Keynesian economics by focusing attention on the Austrian school.

This title, first published in 1979, presents the Ph.D. thesis of the world-renowned economist and financial expert, Willem Buiter. In Part I, three alternative specifications of temporary equilibria in asset markets, including their implications for macroeconomic models, are discussed; Part II examines the long-term implications of some short-term macroeconomic models. The analysis of the theoretical foundations of 'direct crowding out' and 'indirect crowding out' is particularly prominent, with the result that a synthesis of short-term macroeconomic analysis and long-term growth theory is formulated. The traditional tools of comparative dynamics and stability analysis are employed frequently. However, it is also argued that the true scope of government policy can only be adequately evaluated with the aid of concepts such as dynamic and static controllability. Temporary Equilibrium and Long-Run Equilibrium is a valuable study, and relevant for all serious students of modern economic theory.

This book provides a comprehensive and concrete illustration of time series analysis focusing on the state-space model, which has recently attracted increasing attention in a broad range of fields. The major feature of the book lies in its consistent Bayesian treatment regarding whole combinations of batch and sequential solutions for linear Gaussian and general state-space models: MCMC and Kalman/particle filter. The reader is given insight on flexible modeling in modern time series analysis. The main topics of the book deal with the state-space model, covering extensively, from introductory and exploratory methods to the latest advanced topics such as real-time structural change detection. Additionally, a practical exercise using R/Stan based on real data promotes understanding and enhances the reader's analytical capability.

This book offers an alternative framework for macroeconomic policy in Malaysia, derived from the universal principles of social justice espoused in the objectives of the Shariah. It attempts to holistically analyze issues related to public finance, which has been criticized for lack of transparency and justice in wealth distribution. This book explores these criticisms and discusses the principles of Islamic finance that may be applied to macroeconomic policymaking to create a better economy overall. It presents a case for a flat tax system, to make the economy more resilient to shocks, and financing methods that limit interest-rate-based debt contracts and allow greater risk sharing among the market participants on a broad scale. Using both qualitative and quantitative methods, this book models the Malaysian economy based on policies that apply the fundamental Islamic finance principle of risk sharing to demonstrate its benefits in spurring growth, promoting distributive justice, rendering the economy more stable, strengthening the potency of monetary policy, enhancing fiscal governance, and improving financial inclusion. The book will be of interest to students, policymakers, financial institutions, researchers, ministries of finance, central banks, securities commissions, and anyone interested in alternative economic paradigms.

In the curricula of highly ranked MBA programs, two areas of discussion are conspicuously absent: International Trade, and Global Macroeconomic Policy. In this post-financial crisis environment, as the US and other advanced economies continue to experience sluggish growth, persistently high unemployment, and political agitation for increasingly protectionist policies, discussions pertaining to trade, currencies, and international capital flows are often fraught with emotion, tension, and hysteria. This book cuts through the emotions and superficial "solutions" and provides the reader with a thorough understanding of the hard-hitting theoretical models that drive the global flow of goods, services, and capital in the real world. A key feature of this volume is the presentation of the theoretical models, and the discussion of their implications in the context of real-world applications. This text is uniquely designed for current and future business leaders who are, or will be, engaged in the global economy. Armed with an understanding of the theoretical underpinnings driving goods, capital and ideas across national boundaries, readers will learn to anticipate the effects of trade and macroeconomic policy changes, and will have the tools to make sound, informed decisions for themselves and their global organizations.

Written during the early 1920s, at a time when Europe was still recovering from the catastrophe of the First World War, L.V. Birck's The Scourge of Europe examines the economic issues surrounding the existence of public debt, its history, and possible approaches to problems associated with public debt as they were being pursued by the great powers of the time. Birck's analysis contains a rigorous theoretical exposition and explanation of public debt as it was understood in the crucial period leading up to the Great Depression. This is then followed by an insightful exploration of the role of public debt in European financial and economic history. Finally, some reflections on the policies of England, the United States, France and Germany in the latter part of the nineteenth and early-twentieth centuries are included. This book will appeal to economic and financial historians, as well as to those generally interested in European policies towards debt from the Middle Ages to modern times.

A study of the Malaysian economy and labour market. Malaysia has enjoyed an enviable growth record over the last 25 years of the 20th century, which few nations can match, and has also been keen to judge her performance against non growth criteria of poverty eradication and national unity following the emergence of racial conflict in 1969. There are many lessons for policy makers elsewhere of this active approach to poverty eradication and social restructuring while generating rapid growth, which stands in sharp contrast to both laissez faire and orthodoxy.

`Bilin Neyapti provides a framework for understanding some of the most important issues confronting the world's economy today. Viewing the government as a social planner charged with the task of delivering sustainable development as a public good, she examines features of global markets such as central bank independence, inflation targeting, monetary unions, and currency boards, in each case evaluating the capacity of the relevant institutions to deliver efficiency, equality, and stability over the long term. Neyapti's broad-ranging and ambitious book should be of value to anyone interested in the development and improvement of the institutions undergirding the world's financial system.' - Geoffrey P. Miller, New York University Law School, US `Poor nations have learned the hard way that there is no greater threat to their economic development than macroeconomic crises. Avoiding macro instability in turn depends on good monetary and fiscal institutions. This book by Bilin Neyapti - part textbook, part treatise - is a terrific synthesis of the relevant literature and an excellent addition to it.' - Dani Rodrik, Harvard University, US The fading explanatory power of earlier development theories in providing a satisfactory account of diverse developmental experiences has necessitated a new framework to understand economic development. Bilin Neyapti presents this new framework, known as New Development Economics (NDE), which combines new institutional economics with collective action theory to explain the dynamic interaction between institutions and economic development. Besides reviewing earlier development theories and the fundamental building blocks of NDE, the author uses the NDE framework to present theoretical underpinnings and panel evidence on the effectiveness of fiscal and monetary institutions. The book incorporates the essential elements of institutional theory and highlights the issues pertaining to the measurement of institutional characteristics and the empirical analyses involving such measurement. It provides the theoretical framework of and empirical evidence on fiscal institutions, covering budgetary rules and procedures as well as fiscal decentralization, and reviews the theoretical framework for monetary institutions such as central bank independence, currency boards, monetary unions and inflation targeting in addition to providing empirical evidence on their effectiveness. The role of bank regulation and supervision is also investigated. This path-breaking and original book will prove a fascinating read for a wide-ranging audience including academics, think tanks, international development agencies and policymakers within the fields of development, economics, heterodox economics and money, banking and finance.

This book analyzes the revenues from the creation of currency by a central government. Adopting an institutional perspective, it develops a general theory of seigniorage by identifying three monetary regimes in economic history and the history of economic thought: a commodity currency, a fiat currency and a credit currency regime. As such it provides a modern analytical framework to analyze the nature of revenues from the creation of currency and their optimal height, whether currency is issued by means of minting coins, by printing and spending paper notes, by crediting private entities, or combinations thereof. The results of this analysis stretch beyond the immediate topic. The book establishes a relationship between the theory of seigniorage and government debt, the theory of the interest rate, the optimal rate of inflation, or the effectiveness and inflationary limits of outright monetary transactions.

This textbook gives a comprehensive introduction to stochastic processes and calculus in the fields of finance and economics, more specifically mathematical finance and time series econometrics. Over the past decades stochastic calculus and processes have gained great importance, because they play a decisive role in the modeling of financial markets and as a basis for modern time series econometrics. Mathematical theory is applied to solve stochastic differential equations and to derive limiting results for statistical inference on nonstationary processes. This introduction is elementary and rigorous at the same time. On the one hand it gives a basic and illustrative presentation of the relevant topics without using many technical derivations. On the other hand many of the procedures are presented at a technically advanced level: for a thorough understanding, they are to be proven. In order to meet both requirements jointly, the present book is equipped with a lot of challenging problems at the end of each chapter as well as with the corresponding detailed solutions. Thus the virtual text - augmented with more than 60 basic examples and 40 illustrative figures - is rather easy to read while a part of the technical arguments is transferred to the exercise problems and their solutions.

The horizontalist perspective is an extension of the post-Keynesian approach, that has hitherto focused on a theory of credit and money. This book extends horizontalism beyond its traditional boundaries and makes it consistent with the post-Keynesian theories of output and the open economy. The authors compare and contrast the horizontalist position with various orthodox and non-orthodox views on money. They argue that horizontalism is perfectly compatible with liquidity preference, credit constraints, and a flexible interest-rate mark-up, and address recent developments in banking that reinforce the validity of a horizontal schedule of credit-money. The overall intention is to place horizontalism within the current heterodox tradition as a general theory of the creation of money that is consistent with the post-Keynesian view on macroeconomic policy. Credit, Interest Rates and the Open Economy is essential reading for those who wish to expand their theoretical understanding of international financial issues and will be of great interest to those involved in macroeconomics, money and banking and radical economics.