Short run responses to foreign exchange crises

This paper constructs a short-run general equilibrium model for an LDC-type economy. Some key features are the possibility of excess capacity and the presence of quantitative restrictions on exports and imports. A rich variety of pricing possibilities for tradeable goods is allowed for, including “water in the tariff” as well as domestic prices exceeding world prices with binding import quotas.The model is used to analyze alternative responses to a foreign-exchange crisis. Import controls, devaluation and cuts in government expenditures are compared. We find that: i) import quotas can worsen the balance of trade, ii) rationing foreign exchange for noncompetitive imports is stagflationary, increasing prices even under excess capacity, iii) a devaluation has strong effects on income distribution, although output and employment expand, and iv) cuts in government spending are deflationary but the income distribution effects are neutral.     

Currency devaluation and trade balance: Evidence from the US services trade

This study aims to revisit the effectiveness of using currency devaluation as a policy tool to improve trade balance by estimating the exchange rate elasticities of services trade between the US and rest of the world with quarterly disaggregated services trade data from 1999 to 2015. Empirical results reveal that the impacts of currency devaluation on individual services trade are mixed and largely depend on the nature of services. Using currency devaluation to raise export services trade and reduce import services trade seems to be more effective in the long-run but not in the short-run. It is interesting to note that some individual services trades are insensitive to exchange rate changes. The estimates also reveal that most categories of services trade are income elastic and economic growth plays a key role in determining the imports and exports of services trade.     

Measuring the economic impacts of recent oil price shocks on oil-dependent economy: evidence from Malaysia

This paper examines the economy-wide impacts of recent oil price shocks on the Malaysian economy. To achieve this objective, an integrated methodological framework that combines econometric and input–output models is utilized to assess the impacts of an oil price shock on tax revenues, employment, labor income and gross domestic product (GDP). Our results reveal that the recent oil price shocks significantly affects these macroeconomic variables. The decline in oil prices from 2015 to 2016 reduces tax revenues by 10.5%, lower GDP by 1.9% and increases the unemployment rate by 0.3%. As such, the sharp crunch in oil prices serves as a reminder to policymakers on the vulnerability inherent in overreliance on oil exports and the urgent need to diversify the economy.     

Food security, consumption diversification and foreign exchange balances in Indonesia: Results from a multi-commodity simulation

Many countries adopt economic development strategies, within which an important element is the maintenance of low and stable food prices. In Indonesia, this is achieved principally through government subsidies to consumers of imported rice, the total cost of which fluctuates considerably from year to year, depending on world price movements and domestic production performance. Higher and possibly less stable domestic food prices appear inevitable in Indonesia, however, as the spectre of reduced oil revenues increases the government's concern with the cost of its food policy. Results from a stochastic simulation model of the agricultural sector show that the food price risk to which consumers and producers would be exposed in the absence of the stabilizing component of Indonesia's food policy would be considerable, rendering this component an unlikely area for significant change. A viable policy option appears to be the continuance of rice and wheat price stabilization, but with a graduated increase in the relative price of rice, reaching a total of 10% by 1985. Such a policy could result in net self-sufficiency in foreign exchange from staple food trade by 1990 and an improvement in aggregate economic surplus, although the expected decade improvement in food-energy consumption per capita would fall from 10% to 8%.     

Must high commodity prices depress the world economy? An application of a world model system

The impact of higher primary commodity prices on the world economy is central to the North-South dialogue. The less developed countries are seeking a way to obtain a larger share of world income. In the context of current discussions of commodity price stabilization, UNCTAD's “integrated programme” for example, this is likely to mean higher commodity prices. A critical question is then, “Must higher prices for primary commodities depress the industrial economies?”The cyclical swing of 1973–1975 would seem to support the thesis that high primary commodity prices lead to recession in the industrial countries. Yet this experience is not conclusive evidence. Many complex forces, some natural and others policy induced, accounted for the recession. The impact of primary commodity prices must be considered in a full system, recognizing not only the direct costs, but also the resulting demand feedback. Under different circumstances, higher payments to the commodity producing LDCs may well increase demand for manufactures and stimulate exports and industrial activity in the developed countries.This paper uses a version of the LINK world model system to examine the linkages between commodity prices and world economic activity. In the first part we examine the demand feedback in a simple theoretical model of the interrelationships between commodity consumer countries and the commodity producers. In the second part we use an empirical system, COMLINK, the version of the LINK system that incorporates commodity models and commodity price linkages, to simulate various types of commodity price impacts.     

Energy supply shocks: Macroeconomic consequences for Ukraine

In exploring the short-term macroeconomic effects of energy supply shocks in Ukraine, this paper relies on the simplifying assumption that enterprises face economic regulation but not ownership uncertainty or a soft budget constraint that would adversely affect their behavior. In a sense, it assumes that Ukraine's economy is already at the second stage of reform, when ownership, contract-enforcement, and hard budget constraint questions are less of an issue. Under these assumptions and if real wages are protected, the analysis yields clear messages. Protecting the domestic economy by not passing through external price increases may cushion the decline in production and social welfare, but at a heavy cost to savings and investment; not only does it postpone adjustment and the emergence of a competitive economy, but it also deprives the economy of investible resources. Passing through external price increases while maintaining a fixed-price regime may improve the mobilization of resources but at a heavy cost to output and welfare, because it induces a heavy contraction in activity. Liberalizing prices in the nonenergy sectors in conjunction with passing through external price increases allows these sectors to generate the larger resource transfers required by a deteriorating terms of trade, in turn pulling up output; the economy can settle at a higher level of activity and welfare than in the presence of fixed prices. The conclusion is that Ukraine must clarify ownership and contract-enforcement issues as well as harden the budget constraints of enterprises as rapidly as possible, liberalize nonenergy prices at a minimum, and begin adjusting domestic energy prices to reflect the opportunity cost of these resources. Since the fall of 1994, Ukraine has proceeded to liberalize its price and trade regime, which should bring the economy a long way to recovery as outlined in this paper.     

Commodity prices and the world distribution of income

Some advocates of a new international economic order recommend raising prices of commodities exported by developing countries as a means of reducing the inequality of world income distribution. A simulation model using commodity trade data and income distribution data for 68 industrial and developing countries examines this policy alternative. Initial data compilation reveals that internal inequality is as important as international: The world income share of the poorest 40% of people would be twice as high in the absence of intracountry inequality. Calculations using actual price experience in the “great inflation” of 1972–1975 show that despite the large relative price changes for some commodities (especially oil), these changes left the world size distribution of income virtually unchanged. Separate policy simulations show that even a quadrupling of the price of ali “equalizing” commodities (those mainly exported by LDCs) would leave the size distribution of world income practically unaltered (even under optimistic assumptions about intracountry distributional incidence), although some individual LDCs would gain. Increasing commodity prices therefore appears to be an ineffective means of increasing international equity, quite apart from questions about the feasibility of cartels or commodity agreements.     

我国资源价格重构的理论思考与机制探讨

要推进经济增长方式转型,资源价格重构势在必行。文章首先归纳了资源价格扭曲的内外症状,并剖析了症结和危害;认为就整体而言,价格重构应侧重于矫正内部扭曲;就结构而言,只能定位于部分地消除资源内外比价的失调;基于可持续发展视角下对资源价值及其构成的理论探讨,既剖析了我国资源价格扭曲的实质,又深入探讨了资源价格的基本改革图景;最后,从理论上指出了边际机会成本定位法的严重不足,强调我国资源价格重构应该采取现实可行的"实际补偿顺推法",并立足全局,给出了对策建议。     

房价上涨路径分析综述

1998年住宅实行商品化后,房价上升迅速,房价上升是由于我国货币供应量超过国民经济总量所致。货币超发与我国在改革开放后经济的增长模式高度相关,以出口和投资特别是政府投资带动的经济发展,在经济制度选择上引致货币被动和主动的超发。政府投资的资金依赖于城镇土地出让金,在城镇土地出让数量受到限制的约束下,土地出让金被不断地推高,带动房价上涨超过居民的实际购买力水平。     

A small forecasting model of the world oil market

An annual, small-scale econometric model of the world oil market was developed to analyze oil market conditions and oil prices for the period 1986–1991. The model determines the oil price by a market-clearing condition, given world economic activity and the strategic supply behavior of the OPEC core countries. The effects of OPEC production cut in 1987 upon oil prices are evaluated, and alternative oil price profiles are provided. A simulation experiment suggests that if the OPEC core is pressed to defend the OPEC share in oil supply, then wide price swings may become inevitable.     

抗战时期物价问题之我见

本文分析了抗战时期中国经济困难及物价上涨的原因,介绍了国民政府的经济对策和美国的对华经济援助,论述了稳定物价应采取的措施,解析了战时物价问题得不到根本解决的症结在于严重的货币超发。     

Effects of fiscal policy on the U.S. economy: Empirical estimates of crowding out

This study examines the short-and intermediate-run effects of a permanent reduction in U.S. personal income taxes on interest rates, output, prices, exchange rates, and the current account, holding government spending and money growth fixed. The theoretical analysis suggests that interest rates and domestic consumption will rise but that net exports and interest-sensitive expenditures will fall. Also, the foreign currency value of the dollar will rise except possibly when output increases due to positive supply-side effects or to elimination of unemployment. These theoretical conclusions are essentially confirmed by simulations using the Federal Reserve Board's MPS quarterly econometric model and its multicountry model.     

Towards an adequate and sustainable replacement rate in defined benefit pension systems: The case of Spain

The main objective of this article is to determine, based on internal data, replacement rates for a defined benefit pension system, with two aims: the adequacy of pensions – measured in terms of the expenditure of retirees – and the sustainability of the system. For this purpose two instruments are used: the internal rate of return, and techniques based on systems of notional accounts. These figures, derived from internal data, will serve, by comparison with the replacement rate of the system, to assess whether the system tends more towards adequacy or sustainability. The system studied is that of Spain.     

Indexation of international commodity prices through international buffer stock operations

The developing economies have been advocating the indexation of the prices for their primary commodity exports by tying such prices to other relevant international prices, such as the prices of imports to the less-developed countries. We have used econometric models to simulate a program of indexation of the prices of the ten UNCTAD core commodities at their 1963 levels for 1963–1975. The results suggest definite difficulties in such a program. Most notably the order of magnitude of the costs of buffer stock operations and financing is likely to be prohibitive. Also the distribution of benefits and losses among the less-developed countries is quite arbitrary. Therefore we are very skeptical about indexation by buffer stock operations.     

《史记·货殖列传》中经济思想和实证方法评述

《史记·货殖列传》蕴含了非常丰富的经济思想,比如交易的福利、市场自由主义与政府的作用。司马迁认为,交易在财货增长中具有决定性的作用。这一点足以和现代经济学理论体系相媲美。同时,文中对产业利润的分析和对价格问题的诠释是另一个应被广泛称颂的亮点。现代人对《货殖列传》的解读一般以思想阐述为主,很少有人注意它的研究方法。事实上,司马迁在该文中已率先使用了描述性的实证分析方法,这一点和后来的亚当＆#183;斯密、马克思所使用的分析方法没有太多的差别。     

Policy Simulation of the Indian Silk Industry through an Econometric Model

This study aimed at understanding and quantifying the relationship between the important variables of the various subsectors of the Indian silk industry through an econometric simulation model, and using the model for forecasting as well as policy simulations. Forecasts of the endogenous variables of the system (demand, supply, and prices of mulberry cocoons, raw silk, and silk fabric) for the period 1991–92 to 2000–01 indicates that the growth in the industry will slow down in the future. Policy simulations were undertaken to assess the changes in the import price of raw silk, export price of fabrics, and regulation of the quantity of imports of raw silk on the silk industry. While imports and exports were closely linked, their impact on the silk industry was not very high. It was also revealed that the income of the consumers and mulberry acreage have significant influence on the industry.     

Exchange rates and the Swiss economy

Safe haven capital inflows and other factors have caused the Swiss franc to appreciate and posed challenges for policymakers. We find that these exchange rate changes do not affect the volume of exports from Switzerland’s most advanced sectors, pharmaceuticals and watches, but do matter for exports of medium-high-technology products such as capital goods and machinery. We also report that appreciations do not affect stock prices and goods prices for the pharmaceutical and watch industries but cause both stock and goods prices to tumble for the capital goods and machinery sectors. We draw many policy lessons from these findings for Switzerland and for the rest of the world.     

Macroeconomic stabilization of primary commodities price cycles in developing economies

This paper proposes a strategy for stabilizing macroeconomic policy to address jointly the effects of changes in the prices of food, minerals and energy (oil). Our approach differs from the general literature, which analyzes the effects of a commodity boom or bust and therefore the solutions in terms of economic policy separately, that is, by type of commodity. The stabilization strategy that we propose considers a key fact affecting many open economies, namely, that they not only are affected by increases or decreases in commodity prices, but also benefit from them. Consequently, we use a structural model for an open economy with restricted households to show that welfare could be improved with a fiscal rule incorporating transfers to stabilize household consumption. This strategy noticeably dominates an aggressive monetary policy focused only on stabilizing inflation and a fiscal policy that has an excessive bias toward saving income from exports.     

Codependent Cycles of Chinese Inflation

对我国通胀率、农产品价格和M2等三个变量进行相依性周期的检验与分解表明,农产品价格周期波动剧烈,在很大程度上为“圈地”等导致的粮价波动以及诸如猪肉价格暴涨暴跌等因素对农产品价格的冲击效应。阕此,将现行的粮食收购保护价改革为粮食生产保护价与销售保护价,将减弱粮价等因素对农产品价格和通胀的冲击强度。农产品价格与通胀率和M2的周期弱相依,M2与通胀率的周期强相依,它们周期成分的交点形成“梭形”,说明我国货币政策目标在抑制通胀和促进增长之间交替转换。在农产品价格周期处于基本平稳时,可实施适度宽松的货币政策刺激经济增长,但其扩张幅度应以M2的相依周期成分扩大至1．5左右为宜;在农产品价格怏速上涨或者周期成分的上升期,应以抑制农产品价格为先导,刺激经济增长的适度宽松货币政策宜延缓至农产品价格周期处于平稳或者下行期,再予以实施。     

Codependent Cycles of Chinese Inflation

A test and decomposition of the codependent cycles of the consumer price index (CPI), agricultural producer price index (APPI) and M2 reveals that the sharp cyclical fluctuations in agricultural producer prices largely stem from the grain price fluctuations induced by factors such as land enclosure and the impact on APP of the abrupt changes in pork prices and other factors. Therefore, changing the current policy of grain purchasing price subsidies to one of subsidies to grain production and sales will reduce the impact of grain prices and other factors on APP and inflation. The weak cyclic codependence among APP, CPI and M2, along with the strong cyclic codependence between M2 and CPI, has given rise to a “shuttle-shaped” intersection of cyclic elements. This indicates that China’s monetary policy goal has been alternating between curbing inflation and stimulating growth. When the APP cycle is basically stable, China can implement a moderately easing monetary policy to stimulate economic growth, but this must be based on a 1.5 or so margin of increase in the codependent cycle components of M2. When APP rises sharply or is in the rising phase of cycle elements, China should emphasize APP control, and should delay the moderately easing monetary policy till the APP cycle becomes stable or is in the downlink phase.