European Economic Review
European Inflation Dynamics [статья]
Опубликовано на портале: 31-10-2007Jordi Gali, Mark Gertler, J. David Lopez-Salido European Economic Review. 2001. Vol. 45. No. 7. P. 1237-1270.
We provide evidence on the fit of the New Phillips Curve (NPC) for the Euro area over the period 1970-1998, and use it as a tool to compare the characteristics of European inflation dynamics with those observed in the U.S. We also analyze the factors underlying inflation inertia by examining the cyclical behavior of marginal costs, as well as that of its two main components, namely, labor productivity and real wages. Some of the findings can be summarized as follows: (a) the NPC fits Euro area data very well, possibly better than U.S. data, (b) the degree of price stickiness implied by the estimates is substantial, but in line with survey evidence and U.S. estimates, (c) inflation dynamics in the Euro area appear to have a stronger forward-looking component (i.e., less inertia) than in the U.S., (d) labor market frictions, as manifested in the behavior of the wage markup, appear to have played a key role in shaping the behavior of marginal costs and, consequently, inflation in Europe.
Опубликовано на портале: 07-07-2005Reinhard Selten European Economic Review. 1998. Vol. 42. No. 3-5. P. 413-436.
On the basis of experimental evidence reported in the literature the paper draws conclusions about the bounded rationality exhibited by human economic behaviour. Among the topics discussed are presentation effects caused by superficial analysis, strategic reasoning and strategy construction based on reciprocity and fairness, avoidance of circular concepts in step by step strategic reasoning, ex-post rationality and learning direction theory, presence of both adaptive and analytic approaches to repeated decision tasks, and the absence of quantitative expectations and optimization in typical repeated game strategies
Опубликовано на портале: 21-10-2007Avinash K. Dixit European Economic Review. 2001. Vol. 45. No. 4-6. P. 589-613.
This paper constructs various models of the EMU and ECB when member countries have different objectives. Voting in pursuit of national interest can yield moderate and stable inflation. The metaphor of Walsh-type contracts implements a monetary policy rule that averages the member countries' most preferred rules. In a repeated relationship where a country suffering a large adverse shock can use political bargaining to subvert the ECB's commitment, the optimal rule should incorporate some flexibility to forestall that. Finally, freedom of national fiscal policies undermines the ECB's monetary commitment; this may justify fiscal constraints like the Stability and Growth Pact.
Опубликовано на портале: 22-10-2007Avinash K. Dixit, Luisa Lambertini European Economic Review. 2001. Vol. 45. No. 4-6. P. 977-987.
We consider monetary-fiscal policy interactions in a monetary union. If monetary and fiscal authorities have different ideal output and inflation targets, the Nash equilibrium output or inflation or both are beyond the ideal points of all authorities. Leadership of either authority is better. Fiscal discretion entirely negates the advantage of monetary commitment: The optimal monetary rule is equivalent to discretionary leadership of monetary over fiscal policy. Agreement about ideal output and inflation creates a monetary-fiscal symbiosis, yielding the ideal point despite disagreement about the relative weights of the two objectives, for any order of moves, without fiscal coordination, and without monetary commitment.
Monetary Policy in Open Economies [статья]
Опубликовано на портале: 31-10-2007Harris Dellas European Economic Review. 2006. Vol. 50. No. 6. P. 1471-1486 .
The recent literature on monetary policy in open economies has produced a strong presumption in favor of activistic policy and flexible exchange rates. We argue that this result may owe much to the combination of two commonly made assumptions: That nominal goods prices are rigid. And that the monetary authorities have a lot of information about the economy. When the source of nominal rigidity is found in wages and monetary policy is conducted according to less information demanding rules (such as a standard interest rate rule) policies that stabilize the money supply or the nominal exchange rate may perform better
Опубликовано на портале: 14-11-2003Peter Bearse, Gerhard Glomm, B. Ravikumar European Economic Review. 2000. Vol. 44. No. 4-6. P. 904-915.
Abstract We use computational experiments to study the impact of means-tested education vouchers on the level and distribution of educational expenditures. Our benchmark is a regime where public and private schools coexist. Our means-tested voucher regime is one where households with lower incomes receive a larger voucher. Both the level of funding and the allocation of vouchers by income are endogenously determined by sequential majority voting. We examine the effect on educational expenditures of switching from a mixed public/private education regime to a means-tested voucher regime or to a uniform voucher regime where all households receive the same voucher. We find that: (i) Under means-tested vouchers, public funding for education is the smallest but average educational expenditure is the largest; (ii) inequality of educational resources is smaller under means-tested than that under uniform vouchers or the mixed regime; (iii) the `poor' and the `rich' households prefer means testing to either the mixed or uniform regime.
Опубликовано на портале: 12-07-2007Drew Fudenberg, Richard J. Gilbert, Joseph E. Stiglitz, Jean Tirole European Economic Review. 1983. Vol. 22. No. 1. P. 3-31.
This paper investigates when patent races will be characterized by vigorous competition and when they will degenerate into a monopoly. Under some conditions, a firm with an arbitrarily small headstart can preempt its rivals. Such ‘ε-preemption’ is shown to depend on whether a firm that is behind in the patent race, as measured by the expected time remaining until discovery, cant ‘leapfrog’ the competition and become the new leader. An example of an R&D game with random discovery illustrates how ε-preemption can occur when leapfrogging is impossible. A multi-stage R&D process allows leapfrogging and thus permits competition. A similar conclusion emerges in a model of a deterministic patent race with imperfect monitoring of rival firms' R&D investment activities.
Pyramidal Groups and Debt [статья]
Опубликовано на портале: 16-06-2006Magda Bianco, Giovanna Nicodano European Economic Review. 2006. Vol. 50. No. 4. P. 937-961.
This paper suggests that debt should be raised by subsidiaries in order to exploit the limited liability of the holding company. However, when this behavior increases the cost of funds, the holding might prefer to raise debt to a point where it would also default when subsidiaries are insolvent. After accounting for standard controls, we find that holding companies in Italian pyramids have higher leverage than subsidiaries and that the cash-flow share of the entrepreneur in the subsidiary does not play a significant role. These findings are consistent with the implications of our model of group capital structure.
Опубликовано на портале: 03-12-2007Takayuki Tsuruga European Economic Review. 2007. Vol. 51. No. 5. P. 1107-1125.
We propose a general equilibrium model that explains the empirical evidence of the hump-shaped response of inflation to a monetary policy shock. The model replaces backward-looking indexation à la Christiano et al. [2005. Nominal rigidities and the dynamic effect of a shock to monetary policy. Journal of Political Economy 113(1), 1–45] with a dynamic externality into the production function of firms. The model, armed with sticky wages and variable capital utilization, has two offsetting effects on real marginal cost over the business cycle. First, increasing factor prices raise real marginal cost in response to an expansionary monetary policy shock in the intermediate run. Second, a dynamic externality reduces real marginal cost in the short run because it raises productivity in response to an increase in output following the shock. Overall, the resulting short-run decrease and intermediate-run increase in marginal cost replicate the hump-shaped behavior of inflation under purely forward-looking price and wage Phillips curves.
The Unbearable Tightness of Being in a Monetary Union: Fiscal Restrictions and Regional Stability [статья]
Опубликовано на портале: 03-12-2007Evi Pappa, Vanghelis Vassilatos European Economic Review. 2007. Vol. 51. No. 6. P. 1492-1513.
We study how constrained fiscal policy can affect macroeconomic stability and welfare in a two-region model of a monetary union with sticky prices and distortionary taxation. Both government spending and taxes can be used to stabilize regional variables; however, the best welfare outcome is obtained under some tax variability and constant regional inflations. We use a variety of rules to characterize constrained fiscal policy and find that strict fiscal rules coupled with a monetary policy that targets union-wide inflation result in regional inflation stability and the welfare costs of such rules are not as unbearable as one would expect. Fiscal authorities can enhance welfare by targeting the regional output gap, while targeting regional inflation is less successful since inflation stability is guaranteed by the central bank.