KREDIT und KAPITAL - Issue 2/1975



Ehrlicher, Werner
Die Neuverschuldung der Gebietskörperschaften im Jahre 1975

Mayer, Thomas
The Structure of Monetarism (I)

Pohl, Rüdiger
Zur Kritik der Theorie der Vermögensstruktur und der relativen Preise

Fautz, Wolfgang M.
Geldbasis und Liquiditätsbasis. Alternative analytische Rahmen für die Untersuchung von Geld- und Kreditprozessen in der Bundesrepublik Deutschland


Braun, Hans-Gert
Zum Problem der Prüfung von Kapitalhilfe-Kredit-Anträgen

Book Reviews

Woll, Artur
Allgemeine Volkswirtschaftslehre und Cassel-Thieme-Woll: Übungsbuch zur Allgemeinen Volkswirtschaftslehre (Gerhard Zweig)

Looff, Rüdiger
Die Auswirkungen der Zinsliberalisierung in Deutschland (Wolf-Dieter Becker)

Bosch, Heinz-Dieter
Zur Vermögenssituation der privaten Haushalte in der Bundesrepublik Deutschland, Teil I (Manfred Hiltner)

Mülhaupt, Ludwig
Strukturwandlungen im westdeutschen Bankwesen (Rolf Caesar)

Regel, Rudolf and Wolf, Herbert
Das Bankwesen im größeren Europa (Hans Pfisterer)

Stützel, Wolfgang
"Währung in weltoffener Wirtschaft", Lehrstücke der Währungspolitik - unter der Herausforderung des Tages (Werner Steuer)

Freiherr von Rosen, Rüdiger
Der Zentrale Kapitalmarktausschuß - Ein Modell freiwilliger Selbstkontrolle der Kreditinstitute (Hermann Quester)


Ehrlicher, Werner
"New Borrowing of Regional Authorities in 1975"

Public budgets in the Federal Republic of Germany will show a deficit of the order of DM 50 to 60 thousand mill. in 1975. Of the related borrowings, only about DM 20,000 mill. are due to the cyclical situation (DM 5,000 mill. more expenditures and DM 15,000 mill. less revenue); an amount of DM 30 to 40 thousand mill. must be regarded as a structural budget deficit. The latter will persist when there is a renewed upswing, unless incisive, spending and revenue policy action is taken.

To begin with, this contribution analyses the probable deficit with the instruments of the cyclically neutral budget developed by the Council of Experts. To establish a link with past developments, to start with the configuration in 1974 is described; the question is then posed of what cyclical impetus will be imparted by the probable 1975 deficit and how it should be judged. In the light of the given cyclical situation, a positive assessment of the expansive effects is arrived at.

The effects to be expected from the structural budgetary disequilibrium following a revival of economic activity are then examined against the background of developments in the last two growth cycles within the framework of a monetary analysis. In this connection special emphasis is placed on the configuration in the 1966/67 recession and the ensuing renewed upswing. The study arrives first and foremost at a confirmation of the results obtained with the instruments of the cyclically neutral budget, that is, the finding that it will be possible to finance the public deficit in 1975 without any particular strain on the money and capital markets, since on the one hand not only the formation of money wealth by private households, but - despite declining profits - also that of firms will increase, while the borrowing of the housing industry and the entrepreneurial sector will remain very low. On the other hand, in the event of a cyclical upswing, a substantial increase in the borrowings of the entrepreneurial sector, a not inconsiderable increase in consumer credits and renewed larger borrowings of the housing industry -although they will not reach the same figure as in 1973 - must be expected. Over and above this, in the interests of the export surplus and of avoiding arise in the exchange rates, substantial funds will have to be made available for capital exports.

The leeway left for public loans will accordingly be small. If the structural deficit is not considerably reduced, either rapid acceleration of the inflation rate or - if the central bank does not try to avoid it by an appropriate restrictive course - an early stop to the upswing must be reckoned with.


Mayer, Thomas
"The Structure of Monetarism (I)"

This paper has two purposes. One is to clarify the concept of monetarism by isolating its component propositions, and showing the connections between them. It argues that monetarism is not just an aggregation of more or less accidentally combined beliefs, but that it comprises a set of propositions that are connected with each other. The greater part of the paper consists of tracing these connections. The second purpose is to show that, although the monetarist propositions are connected, the connection is loose enough so that someone can accept some of them while rejecting others. Hence, the polarization of economists into monetarists and Keynesians is unnecessary; there is adequate justification for eclectic positions.

Six monetarist propositons are discussed here. They are. (1) the quantity theory, in the sense of the primacy of the monetary impulse in explaining money income, (2) the monetarist view of the transmission process, i. e. how money affects income, (3) a belief that the private sector is inherently stable,(4) a disinterest in allocative details, such as the availability of mortgage funds, or the demand for automobiles, (5) a research strategy that treats the price level as a unit, rather than as the resultant of individual prices, and (6) a preference for reduced-form econometric models. In the forthcoming second part of this paper, six other monetarists propositions bearing on policy are discussed.

To illustrate by an example, the quantity theory is shown to be connected to the monetarist transmission process by the following links: (1) the money stock can be measured better than can the rate of interest, (9) money affects consumption as well as investment, (3) the demand for money is stable, and (4) the existence of significant relative price and stock effects.


Pohl, Rüdiger
"On the Criticism of the Structure of Wealth and Relative Prices"

In the literature on monetary theory, a great deal of space has been devoted to the transmission mechanism of relative prices. The article is a critique of this transmission theory. First: the action maxim assumed in the theory (income maximization by economic entities who act rationally) does not do justice to the broad variety of economically relevant behaviour. Secondly: lacking divisibility of individual wealth components neutralizes relative price effects to some extent. Thirdly: the existence of rigid asset-liability structures is neglected, as is the loss of action autonomy by debtors. Fourthly: thinking in terms of the stock of wealth entails a static consideration of economic behaviour. Furthermore, the substitutability of the various wealth components is limited. Fifthly: the actual rigidity inherent in the wealth structure is not adequately explained with the information costs/transformation costs conception. Sixthly: owing to its line of approach, the theory is incapable of assigning sufficient importance to the development-theory aspect of an economic system.


Fautz, Wolfgang M.
"Monetary Base and Liquidity Base"

In this study an attempt has been made to incorporate into the monetary base conception in an analytically meaningful manner the institution of "free liquidity reserves" which is specific for central bank policy in the Federal Republic of Germany. A magnitude is thus obtained, which includes both the current and the potential liquidity of the banking system. We have called this magnitude the "liquidity base". By analogy with the monetary base, it can be defined either with reference to its sources (supply side) or to its uses (demand side). Hence the points of departure for all instruments of liquidity policy can be identified. The instruments of interest rate policy are combined into an appropriately constructed interest-rate policy parameter. In this way the analytical framework is laid down for an adequate analysis of the impact of monetary policy measures in a system with liquidity reserves.



Braun, Hans-Gert
"Examination of Application for Capital Aid Loans"

The article outlines the various steps in the handling of a public capital aid loan granted by the Federal Republic of Germany to a developing country and gives a survey of the methods applied in examining projects that are to be financed. A compilation of these methods was given in the "Veröffentlichungen aus dem Arbeitsbereich der Kreditanstalt für Wiederaufbau" (KfW) [Publications on the Field of Activities of the Reconstruction Loan Corporation] and to this extent the article is simultaneously a collective review of those publications.

Loan applications are subjected to an examination of the development policy aspects by the Federal Ministry for Economic Cooperation (BMZ) and a technical, bank scrutiny by the KfW. The technical examination is undertaken at several levels. A project must have a high rank in the overall economic priorities scale of the developing country. The necessity of additional capacities is checked with the aid of sectoral analyses. While the examination of the economic and socio economic effects of a project includes a cost-benefit analysis as far as possible, operational economy and liquidity aspects from the focal point of the analysis of the management side of the project.

The methodological problems dealt with by the KfW publications are: cost-benefit analysis, assessment problems in cost-benefit analysis, data requirements for investment studies, combination of efficiency and financial accounting, sectoral analysis of the sugar industry, and the problems of financing domestic costs.