Suchergebnisse

Is macroeconomic stability the Achilles heel of the Chinese economy? Recurrent bouts of inflationary disorder lead some observers to worry that the Chinese government is unable to control the economy. Macroeconomic difficulties show up in a pattern of repeated boom and bust cycles, in which each boom is accompanied by an acute inflationary phase and significant disruption. Moreover, since the reform era began, the peak annual inflation rate of each successive cycle has been higher than that of the preceding one. The most recent attempts to cool off the economy have only led to additional questions. An austerity policy was decreed at the end of June 1993, yet inflation actually accelerated in 1994, and it was not until mid-1995 that it dropped to the levels of mid-1993. The Chinese government was engaged in a quest for an economic "soft landing" for two years without a net reduction in the inflation rate!

The author addresses a few of the many issues relating to Chinese macroeconomic policy. After describing the basic conditions that structure China's macroeconomic problems, he shows that the retreat of the state from most spheres of the economy has not been accompanied by a similar reduction in state fixed investment. The enormous pressures on the banking system by shrinking state revenues and large state investment are examined. (DÜI-Sen)

We provide evidence on narratives about the macroeconomy — the stories people tell to explain macroeconomic phenomena — in the context of a historic surge in inflation. We measure economic narratives in open-ended survey responses and represent them as Directed Acyclic Graphs. We apply this approach in surveys with more than 8,000 US households and 100 academic experts. We document three main findings. First, compared to experts, households' narratives are coarser, focus less on the demand side, and are more likely to feature politically-loaded explanations. Second, households' narratives strongly shape their inflation expectations, which we demonstrate with descriptive survey data and a series of experiments. Third, an experiment varying news consumption shows that the media is an important source of narratives. Our findings demonstrate the relevance of narratives for understanding macroeconomic expectation formation.

A problem in urgent need of attention in modern industrial societies is to discover ways to de-link aggregate output from recorded employment. If the loss were shared in a manner deemed fair by the general public, there would be nothing catastrophic for people in a country where the average income is 35,000 international dollars a year to suffer an income loss of even 25 per cent, let alone 5 per cent. Average income in the UK in 1990 was about 25 per cent less than in 2005. It's hard to maintain that UK citizens experienced significantly lower levels of personal wellbeing in 1990 than they did in 2005. Revival of research on competitive consumption (e.g., Veblen's 'conspicuous consumption') and reports on 'life satisfaction' suggest that a general rise in private consumption among a population enjoying a high standard of living adds little to happiness, or indeed to objectively measured indices of wellbeing.

SUMMARYThis article uses the number of pages in the Code of Federal Regulations to investigate the empirical relationship between federal regulation and macroeconomic performance in the U.S. The analysis uses an aggregate production framework to study the co‐movement of output and the factors of production that results from regulation. The use of cointegration methodology overcomes some shortcomings of traditional techniques. The results suggest that regulation generally is negatively related to aggregate economic performance in both the short run and the long run. Some specific areas of regulation are also found to have important long‐run effects, some positive and some negative.

This book relates the literatures of finance, industrial economics and investment to the theoretical framework of the 'credit view'. Firstly it is assumed that banks' decisions concerning their assets are seen as at least as relevant as their decisions concerning their liabilities. Secondly, securities and bank credit are considered to be highly imperfect substitutes. In this regard it is important to investigate the way industrial and financial sectors interact. In particular, how is the macroeconomy affected by the phenomenon of 'securitization' and by exogenous changes in the industrial structure of the credit market. The interactions between real and financial sectors are also analysed from the point of view of the industrial firm, in a model where the investment and financial decisions of the firm are taken simultaneously

"This paper presents a modeling framework that delivers joint forecasts of indicators of systemic real risk and systemic financial risk, as well as stress-tests of these indicators as impulse responses to structural shocks identified by standard macroeconomic and banking theory. This framework is implemented using large sets of quarterly time series of indicators of financial and real activity for the G-7 economies for the 1980Q1-2009Q3 period. We obtain two main results. First, there is evidence of out-of sample forecasting power for tail risk realizations of real activity for several countries, suggesting the usefulness of the model as a risk monitoring tool. Second, in all countries aggregate demand shocks are the main drivers of the real cycle, and bank credit demand shocks are the main drivers of the bank lending cycle. These results challenge the common wisdom that constraints in the aggregate supply of credit have been a key driver of the sharp downturn in real activity experienced by the G-7 economies in 2008Q4-2009Q1.Published: Systemic Risks and the Macroeconomy, Gianni De Nicolò, Marcella Lucchetta, in Quantifying Systemic Risk (2010), University of Chicago Press"--National Bureau of Economic Research web site