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Full-Text Articles in Social and Behavioral Sciences
Do Parties Matter? A Political Model Of Monetary Policy In Open Economies, Hulya Unlusoy
Do Parties Matter? A Political Model Of Monetary Policy In Open Economies, Hulya Unlusoy
Dissertations
In this doctoral dissertation, I present an original political model of monetary policy in open economies that reframes the Mundell-Fleming model when party politics and long-term interest rates are examined with the three economic variables (monetary policy autonomy, capital mobility, fixed exchange rate) that form the basis of the Mundell-Fleming model. The Mundell-Fleming model explains that there is no monetary policy autonomy in the short term under high capital mobility and a fixed exchange rate system. To see whether I arrive at a different conclusion than the Mundell-Fleming model, I pose the following two research questions: 1. What explains variations …
Rethinking The Economics Of Capital Mobility And Capital Controls, Thomas I. Palley
Rethinking The Economics Of Capital Mobility And Capital Controls, Thomas I. Palley
PERI Working Papers
This paper reexamines the issue of international financial capital mobility, which has become today’s economic orthodoxy. The policy discussion is often framed in terms of the impossible trinity. That framing distorts discussion by representing capital mobility as having equal significance with sovereign monetary policy and control over exchange rates. It also distorts discussion by ignoring possibilities for coordinated monetary policy and exchange rates, and for managed capital flows. The case for capital mobility rests on neo-classical economic efficiency arguments and neo-liberal political arguments. The case against capital mobility is based on Keynesian macroeconomic inefficiency arguments, neo-Walrasian market failure arguments, and …
Saving, Investment And Capital Mobility In African Countries, John Thornton, Olumuyiwa S. Adedeji
Saving, Investment And Capital Mobility In African Countries, John Thornton, Olumuyiwa S. Adedeji
John Thornton
Recently developed panel co-integration techniques are applied to data for six African countries to test the Feldstein–Horioka approach to measuring capital mobility. The results suggest three conclusions: savings and investment in panel data are non-stationary series and they are co-integrated; capital was relatively mobile in the African countries during 1970–2000, with estimated savings–retention ratios of 0.73 (FMOLS), 0.45 (DOLS), 0.51 (DOLS with heterogeneity) and 0.39 (DOLS with cross-sectional dependence effects); and there was a marked drop in the savings–retention ratio from 1970–85 to 1986–2000. The results could be interpreted as indicating that capital mobility in African countries has increased, reflecting …
Worldwide Population Aging: Endogenous Policy Formation And Capital Market Transmissions In The Presence Of Symmetric Demographic Shocks, Mehmet Serkan Tosun
Worldwide Population Aging: Endogenous Policy Formation And Capital Market Transmissions In The Presence Of Symmetric Demographic Shocks, Mehmet Serkan Tosun
Center for Policy Research
This paper examines the transition effects of population aging in more developed regions that is also expected to occur in developing regions in the near future. We address these effects by exploring the influences of internationally mobile capital and a politically responsive fiscal policy in a two-country overlapping generations model. Our results show that the combination of capital mobility and endogenous fiscal policy play an important role in how economies respond to population aging. Capital mobility has consumption smoothing effects but endogenous fiscal policy is the key factor in creating asymmetries between countries. The interaction of the two may even …
On The Internationalization Of Portfolios, William C. Brainard, James Tobin
On The Internationalization Of Portfolios, William C. Brainard, James Tobin
Cowles Foundation Discussion Papers
Portfolio theory has been an important component of open economy macroeconomic models. In those models, it is essential to distinguish among several categories of assets, both foreign and domestic, and to specify the demands and supplies. This framework has become increasingly relevant. Movements of capital across regional and national boundaries, and across currencies, have exploded in volume, thanks to the dismantling of currency and exchange controls and other financial regulations and to revolutionary economies in technologies of communication and transactions. The globalization of financial markets was stimulated by the floating exchange rate regime established in 1973.