Suchergebnisse

In the aftermath of the 2007-08 financial crisis when short-term nominal interest rate reached zero, many central banks worldwide have adopted unconventional monetary policy tools such as quantitative easing where central banks inject money via purchases of long-term government bonds to stimulate their economies. Using the officially published simple-sum monetary aggregates to measure monetary service flows of the economy can be misleading since the simple-sum index ignores the liquidity characteristics of assets in monetary aggregates. Divisia indexes remove the investment motive and measure all other monetary services associated with economic liquidity, by allowing the weights of monetary assets to vary depending on their monetary services at the margin. This dissertation introduces key economic indicators for the Gulf states and discusses the main issues related to monetary policy and theory, aggregation theory and index number theory. It outlines the methods for constructing proper inflation and monetary indexes that are consistent with monetary theory and aggregation theory. Moreover, it provides guidelines for creating optimal monetary aggregation, as suggested by the originator of Divisia monetary aggregation, William A. Barnett. This dissertation reports on the first Divisia monetary aggregates for the complete GCC area and focuses on economic measurement. The second chapter builds monthly time-series of Divisia monetary aggregates for the Gulf area for the period of June 2004 to December 2011, using area-wide data. It also offers an "economic stability" indicator for the GCC area by analyzing the dynamics pertaining to certain variables such as the dual price aggregates, aggregate interest rates, and the Divisia aggregate user-cost growth rates. Our findings unfold the superiority of the Divisia indexes over the officially published simple-sum monetary aggregates in monitoring the business cycles. There is also direct evidence on higher economic harmonization between GCC countries--especially in terms ...

In der vorliegenden Arbeit wird ein supranationaler Monitoring-Mechanismus für das staatliche Schuldenmanagement in der EWU entwickelt. Ein zu diesem Zweck erweitertes Kostenminimierungsmodell nutzt externe Benchmarks, um die optimale Emissionspolitik jedes einzelnen EWU-Mitgliedslandes unter Berücksichtigung der Risikostruktur des aggregierten EWU-Schuldenportfolios zu simulieren. Mit Hilfe eines Kostenvergleichs zwischen simulierter und tatsächlich durchgeführter Emissionspolitik können dann die finanziellen Vor- und Nachteile, die das jeweilige Land durch Abweichen vom EWU-Risikoprofil erreicht, quantifiziert werden. Analog wird auch der aus Marktsicht optimale Instrumenten-Mix für das staatliche Schuldenmanagement in das Modell integriert. Den Marktteilnehmern wird somit ein Instrument an die Hand gegeben, das staatliche Schuldenmanagement der EWU-Mitgliedsstaaten aus einer europäischen Perspektive zu evaluieren. ; Based on the cost minimisation procedure developed by Boothe and Reid (1992), this paper presents a supranational monitoring mechanism for public debt management in the European Monetary Union. External benchmarks reflecting both investor preferences and the risk structure of the aggregate EMU public debt portfolio are used to evaluate national issuance policies against the EMU trend.

The aim of this paper is to review the European Monetary Union's history and development and to describe its advantages and disadvantages. I chose this topic because the EMU is one of the highest levels of integration forms and still unique in history. The member states adopted a single currency, the Euro, a single monetary policy, and coordinated their macroeconomic policies. Due to this high integration, the Euro may yet become a rival for the U.S. dollar. The size of the EMU's geographical area is vast and still expanding. As it spreads, the Euro becomes a more and more relevant currency for international trade, causing a big change in the world's economy. Aside from projecting the Euro's spread, I analyze the special convergence criteria that must be observed by its member states, demonstrating why these criteria are inadequate and why they are so difficult to observe for some countries. It is important to understand the issues facing the Euro and the countries that use or are considering using it as more and more economists discuss the advantages and disadvantages of the European Monetary Union. Many arguments exist for the EMU and many exist against it. Since Hungary, my home country is an EU member state and we intend to join the EMU--although the accession date was postponed several times because our economic indicators did not meet the criteria of the EMU--it is important for us to be knowledgeable about the current situation. Keywords: European Monetary Union, currency, monetary policy

At the heart of fiscal rules in the EU is the (in)famous 3%-threshold: countries should avoid deficits exceeding 3% of GDP. If deficits exceed 3% of GDP, countries are to undertake consolidation ef-forts. This rule has been hotly debated since its introduction. Many argue that it is inherently procy-clical, by forcing countries with 'excessive' deficits to consolidate during recessions. Others stress the poor compliance with European fiscal rules. Two chapters investigate the effectiveness of European fiscal rules. On the plus side, if recom-mended to consolidate, member states do impose fiscal measures aimed at reducing excessive budget deficits. At the same time, and less desirable, the 3%-rule seems to elicit strategic behavior. Fiscal forecasts for euro area countries by the European Commission, which are used to judge com-pliance with the fiscal rules, are biased upwards when the budget deficit threatens to exceed the 3%-threshold. The next two chapters look into the economic consequences of consolidation efforts during the crisis. Although significant consolidation measures, implemented by the Dutch government, might have come at the expense of economic growth – at least in the short term – they do seem to have improved investors' perception of the government's solvency. More generally, public investments were severely reduced in many developed economies. However, results show that in general the decline of public capital has not diminished potential growth, suggesting that the current level of public investments does not pose an immediate threat to potential output in most countries.

This paper seeks to understand the interplay between banks, bank regulation, sovereign default risk and central bank guarantees in a monetary union. I assume that banks can use sovereign bonds for repurchase agreements with a common central bank, and that their sovereign partially backs up any losses, should the banks not be able to repurchase the bonds. I argue that regulators in risky countries have an incentive to allow their banks to hold home risky bonds and risk defaults, while regulators in other "safe" countries will impose tighter regulation. As a result, governments in risky countries get to borrow more cheaply, effectively shifting the risk of some of the potential sovereign default losses on the common central bank.

This paper investigates the international spillovers of government debt and the associated risk of inflation within a monetary union when countries have different pension systems. I use a stochastic two-country two-period overlapping-generations model, where one country has PAYG pensions and the other country has funded pensions. The paper shows that the PAYG country can shift part of its long-term debt burden to the funded country. Moreover, the PAYG country gains from unexpected inflation at the cost of the funded country. In response to these conflicting interests about inflation, inflation risk may rise with the level of debt in the PAYG country. Higher inflation risk harms both countries. Actually, in contrast to the debt burden, the PAYG country cannot share the negative effects of a rise in inflation risk with the funded country. The scenarios analysed might be especially relevant for the years to come.

The aim of the European Union's Macroeconomic Imbalance Procedure (MIP) is to prevent and correct macroeconomic imbalances before they get out of hand. The President's of the EU and Euro area institutions recommend in their report on "Completing Europe's Economic and Monetary Union" to strengthen this procedure. A euro area system of Competitiveness Authorities is recommended, which should "assess whether wages are evolving in line with productivity and compare with developments in other euro area countries and in the main comparable trading partners". Along these lines it is analysed in this Study how well MIP has worked in the past and how it could make a more effective contribution to preventing and correcting divergences in competitiveness. ; Ziel des Verfahrens bei Makroökonomischen Ungleichgewichten (MIP) ist es, Ungleichgewichte zu verhindern und zu korrigieren, bevor sie gefährliche Dimensionen erreichen. Im Bericht der fünf Präsidenten der EU und Eurorauminstitutionen wird empfohlen, dieses Verfahren zu verstärken. Ein System von "Wettbewerbsräten" für den Euroraum soll etabliert werden. Die Räte sollen beurteilen, ob die Löhne im jeweiligen Mitgliedsland im Schnitt mit der Produktivitätsentwicklung wachsen und wie sie (die Löhne) sich im Vergleich zu den Entwicklungen in anderen Euroraumländern und bei den wichtigsten vergleichbaren Handelspartnern entwickeln. Diese Studie analysiert vor diesem Hintergrund wie effektiv MIP in der Vergangenheit funktioniert hat und empfiehlt, wie MIP einen größeren Beitrag leisten könnte, die Divergenzen der Ungleichgewichte zu korrigieren oder zu verhindern.

In this paper there will be made an attempt for a comparative political and economic evaluation of the European Monetary Union with the criterionof regional inequalities of the European Union. The national and the regional inequalities of the European Union will be analyzed under the framework of the policies of the European Monetary Union. Initially we will examine the regional dimension of the european unification on the basis of the European Union with 15 member-states(EU15).As criteria we select the different levels of economic development of the member-states examining the regional inequalities on a national level.On this basis we observ that the member states converge creating the "hard core of Europe" and the member states diverge from the average level of the development of the European Union determining the countries of "community cohesion". Next we apply the previous criteria to the EU27, in other words it is useful to research the inequalities of the levels of economic development, which result in the European Union, if all the other candidate countries would be able to be taken within the EU of 15 as is today.In the EU of 27 with the basis of per capita GNP exist three groups of countries instead of two as exist today. The first group consists of the present member states of the E15,except for Spain,Greece and Portugal of which the GNP per capita exceeds by 20% the new weighted average of the EU27. the second group consists of the present member states of community cohesion ,i.e. Spain greece and Portugal plus Cyprus,Czechia,and Malta with per capita GNP between 68%(Czechia)and 95%(Spain) of the averege of the EU27. The third group consists of the remaining eight candidate countries with GNP per capita below 40% of the average of the EU27,with the exemption of Slovakia and Hungaria of which the GNP per capita lies between 56%-58% of the average of the EU27. Therefore,the expected expansion with the complex inequalities will result in a big challenge for the European regional policy, and the policy of the economic and social cohesion. First,the expansion will more than double the population of the European Union that lives in regions with GNP per capita below of the 75%of the present average of the EU.This number will raise from 71 million at the present to 174 million of people or different stated from 19% of the total of 15 to 36% of the total of EU27. Second the scale and the size of regional inequalities will be increased. Therefore in 1998 for the less development regions of the EU 15 the per capita GNP was on average 65%of the average of the EU15.With the expansion the GNP per capita of the less development regions of the candidate countries was on the 37% of the average of EU15. Therefore, the co-existence of the poor and rich regions within the eu 27 will make the regional inequalities more complex in this part of the Union which consists of poor countries.We make possibly find ourselves in a new allocation of poverty. Finally,we will attempt to achieve the necessary interventions between the EU15 and the EU27, researching the modern problems of the EU under the expected expansion of the European Union.

Building on a micro-founded model of a two region-world economy in the tradition of the new open economy literature, this paper analyses the strategic interaction of large wage-setters and the central bank when switching from a regime of uncoordinated national monetary policies to a monetary union. The establishment of a monetary union is shown to favour wage restraint, provided the uni…ed central bank is not too conservative. Wage discipline may reduce equilibrium in‡ation in a monetary union relative to the one under uncoordinated national monetary policies when wage setting is centralised across member countries.

This paper investigates the international spillovers of government debt and the associated risk of inflation within a monetary union when countries have different pension systems. I use a stochastic two-country two-period overlapping-generations model, where one country has PAYG pensions and the other country has funded pensions. The paper shows that the PAYG country can shift part of its long-term debt burden to the funded country. Moreover, the PAYG country gains from unexpected inflation at the cost of the funded country. In response to these conflicting interests about inflation, inflation risk may rise with the level of debt in the PAYG country. Higher inflation risk harms both countries. Actually, in contrast to the debt burden, the PAYG country cannot share the negative effects of a rise in inflation risk with the funded country. The scenarios analysed might be especially relevant for the years to come.

This paper examines the interactions between multiple national fiscal policymakers and a single monetary policy maker in response to shocks to government debt in some or all of the countries of a monetary union. We assume that national governments respond to excess debt in an optimal manner, but that they do not have access to a commitment technology. This implies that national fiscal policy gradually reduces debt: the lack of a commitment technology precludes a random walk in steady-state debt, but the need to maintain national competitiveness avoids excessively rapid debt reduction. If the central bank can commit, it adjusts its policies only slightly in response to higher debt, allowing national fiscal policy to undertake most of the adjustment. However, if it cannot commit, then optimal monetary policy involves using interest rates to rapidly reduce debt, with significant welfare costs. We show that in these circumstances the central bank would do better to ignore national fiscal policies in formulating its policy.

In der vorliegenden Arbeit beschäftige ich mich mit der theoretischen Analyse von Geld- und Fiskalpolitik in Currency-Board-Systemen und der Währungsunion. Beide Währungssysteme haben seit den neunziger Jahren zunehmend an Bedeutung gewonnen, Currency Boards durch die Rückgewinnung der Glaubwürdigkeit in Zeiten von Hyperinflation und ökonomischer Transformation und die Währungsunion durch die Errichtung des Euro-Währungsraumes. Im ersten Teil der Dissertation wird theoretisch gezeigt, dass Currency-Board-Systeme das Zeitinkonsistenzproblem der Geldpolitik lösen, da aufgrund ihrer gesetzlichen Verankerung eine überraschende Abschaffung und Wechsel­kursänderung unmöglich ist. Die feste Wechselkursbindung an eine stabile Ankerwährung impliziert jedoch auch, dass es kurzfristig nicht möglich ist, auf asymmetrische Schocks zu reagieren. Das zentrale Ergebnis ist, dass ein Currency-Board-System einen Glaubwürdigkeits­vorteil gegenüber einem Standard-Festkurs­system besitzt, wenn das Zeitinkonsistenz­problem der Geldpolitik dominant ist, und dies obwohl asymmetrische Schocks nicht stabilisiert werden können. Eine solche Situation ist vornehmlich in Entwicklungs- und Transformationsländern anzutreffen. In einem erweiterten Modell werden auch die fiskalpolitischen Entscheidungs­variablen berücksichtigt. Obwohl die Fiskalpolitik in einem Currency-Board-System das einzige Instrument zur Stabilisierung von Schocks ist, wird gezeigt, dass Currency Board Systeme höhere fiskalische Disziplin induzieren als Standard-Fest­kurssysteme. Dieses Ergebnis steht in Einklang mit der empirischen Literatur. Das Zusammenspiel von Geld- und Fiskalpolitik ist Gegenstand des zweiten Teils der Dissertation. Hier liegt der Schwerpunkt auf dem Umgang mit Heterogenitäten innerhalb einer Währungsunion. Diese Frage ist empirisch höchst relevant, da sich seit der Einführung des Euros im Jahre 1999 die Wachstums- und Inflationsdifferenzen als beträchtlich und äußerst persistent erwiesen haben. Die zentralen Gleichungen und die Wohlfahrtsfunktion werden in einem Zwei-Regionen-Modell mikro­ökonomisch fundiert. In einem reduzierten Makromodell wird anschließend gezeigt, dass Heterogenitäten, verglichen mit dem homogenen Referenzfall, zu deutlich höheren Wohlfahrtsverlusten führen. Gleichzeitig sind die Wohlfahrtsverluste tendenziell dann am niedrigsten, wenn geldpolitische Führer­schaft unterstellt wird oder wenn alle politischen Entscheidungsträger kooperieren und sich dabei auf gemeinsame Inflations- und Outputziele einigen, die in der Nähe des sozialen Optimums liegen. Diese Ergebnisse beinhalten wichtige Implikationen für die europäische Wirtschafts­politik: Es ist anzustreben, bestehende Heterogenität weiter abzubauen, z.B. durch Steuerharmonisierungen oder einer Beschränkung der Fiskalpolitik der einzelnen Regionen im Sinne des Stabilitäts- und Wachstumspaktes. Durch die primäre Zielsetzung der EZB, eine Inflationsrate unterhalb, aber nahe bei 2 v.H. zu erreichen, ist die Politikführerschaft der EZB derzeitig gewährleistet.

Within a country-size asymmetric monetary union, idiosyncratic shocks and national fiscal stabilization policies cause asymmetric cross-border effects. These effects are a source of strategic interactions between noncoordinated fiscal and monetary policies: on the one hand, due to larger externalities imposed on the union, large countries face less incentives to develop free-riding fiscal policies; on the other hand, a larger strategic position vis-à-vis the central bank incentives the use of fiscal policy to, deliberately, influence monetary policy. Additionally, the existence of non-distortionary government financing may also shape policy interactions. As a result, optimal policy regimes may diverge not only across the union members, but also between the latter and the monetary union. In a two-country micro-founded New-Keynesian model for a monetary union, we consider two fiscal policy scenarios: (i) lump-sum taxes are raised to fully finance the government budget and (ii) lump-sum taxes do not ensure balanced budgets in each period; therefore, fiscal and monetary policies are expected to impinge on debt sustainability. For several degrees of country-size asymmetry, we compute optimal discretionary and dynamic non-cooperative policy games and compare their stabilization performance using a union-wide welfare measure. We also assess whether these outcomes could be improved, for the monetary union, through institutional policy arrangements. We find that, in the presence of government indebtedness, monetary policy optimally deviates from macroeconomic to debt stabilization. We also find that policy cooperation is always welfare increasing for the monetary union as a whole; however, indebted large countries may strongly oppose to this arrangement in favour of fiscal leadership. In this case, delegation of monetary policy to a conservative central bank proves to be fruitful to improve the union's welfare.

The uncovered interest rate parity condition lies at the heart of the "impossible trinity", stating that the three objectives of fixed exchange rates, free capital flows, and independent monetary policy cannot be pursued simultaneously. We argue that although monetary unification does indeed eliminate the tension between exchange rates and nominal interest rates, it does not solve the problem of the intrinsic instability of the system. By eliminating the intra-area exchange rates (with a single currency) and interest rate differentials (with a single common policy rate set by the common central bank), the problem of instability is simply transferred to inflation rate differentials, what we call the (impossibility of the) "uncovered inflation rate parity condition" in a monetary union. The analysis of the actual divergences and imbalances in the EMU, then, suggests that failure to respect the "uncovered inflation rate parity condition" in a monetary union may lead to increasing economic and political tensions. Thus we conclude with the application of the Rodrik's political trilemma to the EMU, which epitomises the existential challenges that the EU faces nowadays.

The EMU fiscal system is specific in many areas compared to other classic fiscal systems of national states. Specific features mainly reflect in the implementation of economic policy within the EMU which is carried out by combining a common centralized monetary policy under the ECB jurisdiction and decentralized fiscal policies under the jurisdiction of the member states. The member states' sovereignty in governing their fiscal policies is one of the key causes of the EU fiscal system underdevelopment, i.e. its indigent structure in relation to "standard fiscal systems". More indigent structure of the EU fiscal system is reflected in the fact that it consists of only three segments. The first one refers to the EU budget which is also the only instrument for implementing fiscal policy at the supranational level. The second one refers to the harmonization of taxation systems in accordance with inputs and other legislation adopted at the EU level with the aim of fostering the single internal market. Finally, the third segment refers to the fiscal policy coordination of the EMU member states related to appropriate fiscal rules, which mainly stem from the Maastricht convergence criteria and the Stability and Growth Pact.