Suchergebnisse

All modern economies have a "chartalist" or "state" money, as acknowledged by Friedrich Knapp and J. M. Keynes. In this paper, I examine the "history" of money to shed light on its origins. I also examine in detail the views of those who accepted the chartalist, or state, approach to money, from Adam Smith to Knapp and Keynes, with some discussion of the views of Hyman Minsky and Abba Lerner. This is then linked to Lerner's "functional finance" approach to money and government spending. I next explore the implications of "modern money" for government policy and show that much economic analysis reaches erroneous conclusions because it fails to recognize the nature of modern money. The state "defines" money when it chooses that in which taxes must be paid. Government spending is the most important determinant of the supply of base money; government deficits are the most important source of net money holdings. This stands in stark contrast to traditional analysis, for fiscal policy is the primary determinant of the money supply and monetary policy determines the short-term interest rate. Because government deficits increase bank reserves, monetary policy is required to offer an interest-earning alternative to excess reserves; essentially, monetary policy consists of sales of government bonds (by the Treasury and central bank) to "drain" excess reserves in order to hit the interest rate target established for monetary policy. Thus, bond sales are not a part of fiscal policy nor are they needed to "finance" government deficits. This analysis leads to several interesting policy conclusions regarding the importance of government deficits and debts and regarding proposals to promote full employment.

An inter-governmental body is encouraging the replacement of currency with the objective of discouraging illegal economic activities. This policy is analyzed in a search-theoretic model where individuals choose legal or illegal production, settle trades via monetary or costly intermediated exchange, and where the government imperfectly monitors monetary transactions. Stationary monetary equilibria with both legal and illegal production exist, in which case the over-provision of currency may increment the extent of illegal production. This result holds also in the presence of intermediated exchange of legal goods. Equilibria with differing transaction patterns and degrees of illicit activities coexist.

A letter report issued by the General Accounting Office with an abstract that begins "Money laundering is a serious issue; an estimated $500 billion are laundered annually. The extent to which money laundering through credit cards may be occurring, however, is unknown. Bank regulators, credit card industry representatives, and law enforcement officials interviewed by GAO indicated that credit card accounts were not likely to be used in the initial stage of money laundering, when illicit cash is first placed into the financial system, because the industry generally restricts cash payments. Industry representatives reported that, in their view, the banks' application screening processes, systems to monitor fraud, and policies restricting cash payments made credit cards less vulnerable to money laundering. At the time of GAO's review, the primary regulatory oversight mechanism to ensure the adequacy of anti-money laundering programs was the Bank Secrecy Act examination, which applies in the credit card industry to issuing and acquiring banks. The regulators said that the issuing banks' application screening process, fraud monitoring systems, and policies restricting cash payments lowered the risk of money laundering through credit cards."

The recent debate over monetary policy strategies concludes that monetary targeting and inflation targeting in practice lead to very similar patterns of central bank behavior. This raises the question why central banks insist on the strategies they use. In this paper, we develop an answer from political economy. After showing that closed-loop monetary strategies using similar information sets imply similar monetary policy performance, we argue that monetary strategies are helpful in solving internal and external coordination problems for the central bank. We illustrate the point by reviewing the Bundesbank's intrpduction of monetary targeting in the mid-1970s. Monetary targeting was important for the Bank as a signal that the previous monetary regime had been overcome, as a means to define the role of monetary policy vis-a-vis other players in the macro economic policy game, and to structure the internal monetary policy debate. The last section discusses the implications of this view for the new European Central Bank. ; Published in connection with a visit to the IIES

The recent debate over monetary policy strategies concludes that monetary targeting and inflation in practice leads to very similar patterns of central bank behavior. This raises the question why central banks insist on the strategies they use. In this paper, we develop an answer from political economy. After showing that closed-loop monetary strategies using similar information sets imply similar monetary policy performance, we argue that monetary strategies are helpful in solving internal and external coordination problems for the central bank. We illustrate the point by reviewing the Bundesbank's introduction of monetary targeting in the mid-1970s. Monetary targeting was important for the Bank as a signal that the previous monetary regime had been overcome, as a means to defina the role of monetary policy vis-a-vis other players in the macro economic policy game, and to structure the internal monetary policy debate. The last section discusses the implications of this view for the new European Central Bank.

This paper examines a specific, generally south to north migratory flow—that of economic migrants from poor nations to advanced market economy countries. Most economic analyses agree that economic migration—as distinct from refugee flows—generates economic benefits. However, the level of benefits generated by these flows vary depending upon the types of migrants accepted (McCarthy and Vernez 1997). Moreover, these economic benefits are unevenly distributed among the host population in the short-term (National Research Council 1997). This uneven distribution creates a public backlash and political demands for restricting migration. To maintain openness toward migration, policies should tailor the level of migration to conditions in the local communities where migrants settle and redistribute the short-term costs associated with these migratory flows.

In this paper, the author deals with: (1) Definition of government; incentive structure under government: taxation, war and territorial expansion. (2) Origin of money; government and money; the devolution of money from commodity to fiat money. (3) International politics and monetary regimes; monetary imperialism and the drive toward a one-world central bank and fiat currency.

The role of money in society has been a controversial topic in economic theory over many years. Particular attention has been devoted to the analysis whether there should be competition in the supply of money, or whether this is best left to a governmental agency. This paper reviews the theoretical literature on these issues. It also gives an overview over some episodes of free banking where banks could issue currency themselves. Finally, we highlight several aspects in which today we have competition between issuers of money, namely in the international context, with electronic money, and in large value payments systems.

The paper presents the results of testing the expectations hypothesis and the market segmentation hypothesis in respect to the T-bill market in Poland. The impacts of interbank money rates and exchange rate on the T-bill yield curve is also examined. Methodology is based on a cointegration analysis. ; peer-reviewed

Monetary and fiscal policy do not determine the stochastic path of prices: in the absence of financial policy, there remains indeterminacy indexed by an arbitrary probability measure over the set of states of the world. With an interest rate policy, and only if the asset market is complete, indeterminacy is nominal: it affects prices, but not the allocation of resources at equilibrium; with a money-supply policy, the indeterminacy is real. Portfolio policy sets the portfolio of assets that the monetary authority employs in open market operations; it determines the equilibrium if the policy is non-Ricardian, but not otherwise; financial rate policy, which sets the rates of return of elementary securities, the contingent price of revenue at each dateevent determines equilibrium allocations and prices. long-lived nominally riskless assets can substitute for assets with contingent payoffs; financial policy, then, sets the maturity structure of debt or the yield curve.

Most studies of Southeast Asian economic change have focused on growth in a few big cities with studies of the countryside tending to concern themselves with the social and environmental impact of metropolitan growth. Very few analysts have looked at the middle distance between metropolis and countryside. This is the horizon and focus of this volume, spurred by recent developments in Thailand. In the past decade, the rise of a frequently violent competition for business and political leadership in the Thai provinces – an arena of growing national importance – has drawn attention to how these centres are being transformed by capitalist development. Promising to be a classic in its field, this volume does much to aid our understanding of this transformation.

The paper discusses the long-run monetary conditions in Ethiopia in the last three decades. These decades can be characterized by large political changes, leading to shocks on income and population growth, and two serious periods of drought. Both affected inflation and real demand for M-1 through shortages of food. Shortage due to drops in rainfall might have long-run monetary consequences. Despite regime shifts we find support for stability of Ethiopian narrow money demand.

Money provides liquidity services through a cash-in-advance constraint. The exchange of commodities and assets extends over an infinite horizon under uncertainty and a complete asset market. Monetary policy sets the path of rates of interest and accommodates the demand for balances. Competitive equilibria exist. But, for a fixed path of rates of interest, there is a non-trivial multiplicity of equilibrium paths of prices of commodities. Determinacy requires that, subject to no-arbitrage and in addition to rates of interest, the prices of state-contingent revenues be set. – Money ; equilibrium ; indeterminacy ; monetary policy ; fiscal policy.

A letter report issued by the General Accounting Office with an abstract that begins "To disguise illegally obtained funds, money launderers have traditionally targeted banks, which accept cash and arrange domestic and international fund transfers. However, criminals seeking to hide illicit funds may also be targeting the U.S. securities markets. Although few documented cases exist of broker-dealer or mutual fund accounts being used to launder money, law enforcement agencies are concerned that criminals may increasingly try to use the securities industry for that purpose. Most broker-dealers or firms that process customer payments for mutual funds are subject to U.S. anti-money laundering requirements. However, unlike banks, most of these firms are not required to report suspicious activities. The Treasury Department is now developing a rule requiring broker-dealers to report suspicious activities. Treasury expects that the rule will be issued for public comment by the end of this year. Various intergovernmental groups, such as the Financial Action Task Force, have been working on recommendations that call for member nations to take various steps to combat money laundering through their financial institutions, including requiring securities firms to report suspicious activities. Although many members countries report that they have issued all or many of these recommendations and have applied them to their securities firms, it is difficult to determine how well the measures are being implemented and enforced."

This paper analyses some monetary policy issues in a model of business cycle derived from Lucas (1972). We show that an autoregressive monetary policy rule may dominate a k-percent rule, and that the optimal monetary policy is characterised by an infinite amount of noise.