Schiltknecht, Kurt
Von der Kreditpolitik zur Geldmengenpolitik - Die Geldpolitik der Schweizerischen Nationalbank in den letzten zehn Jahren
de Strycker, Cecil
La politique monétaire belge au cours des dix dernières années
Crockett, Andrew D. und Heller, Robert H.
The Chancing Role of the International Monetary Fund
Zis, George
A Note on "The Existence of a World Demand for Money Function: Preliminary Results"
Neumann, Manfred J. M.
Konterkarierende Kapitalbewegungen. Eine Ãberprüfung der deutschen Evidenz
Rousslang, Donald J.
Short-Term International Capital Flows and the Effectiveness of Monetary Policy in an Open Economy: The German Case
Läufer, Nikolaus K. A.
Unsicherheit, Friedmansche Regel und optimale Stabilisierungspolitik
Voigt, Fritz und Grunwald, Jorg-Günther
Zur währungspolitischen Situation der Entwicklungsländer
Mülhaupt, Ludwig
Fragen der Bankplanung aus der Sicht von Wissenschaft und Praxis
(Bernd Rudolph)
Coombs, Charles A.
The Arena of International Finance
(Rüdiger von Rosen)
Wagner, Antonin
Verwaltete Währung
(Werner Glastetter)
Münnich, Frank M.
Einführung in die empirische Makroökonomik
(Werner Glastetter)
Von Raffay, Harald
Erscheinungsformen und Auswirkungen von Indexkoppelungen
(Ludwig Paull)
Schiltknecht, Kurt
âFrom Credit Policy to Money-Supply Policy - The monetary policy of the Swiss National Bank in the past ten yearsâ
Pursuant to the confederative constitution the chief task of the Swiss National Bank is "to control the circulation of money in the country, to facilitate payments, and to pursue a credit and monetary policy serving the overall interests of the country". The overall interests of the country have crystallized out as price stability, full employment and the steadiest possible economic growth. Under the system of fixed exchange rates, above all measures to counter the influx of foreign money and to limit the growth of domestic credit were taken in order to attain these objectives Initially, on account of the inadequate instruments available, these measures were clothed in a so-called "gentlemen's agreement". The latter were later replaced by urgent federal resolutions. As time went by, these measures proved no longer adequate. Faced with the decision of following the worldwide inflationary trend or allowing free floating of exchange rates, the Swiss National Bank decided in favour of the second alternative.
In early 1975, the Swiss National Bank was one of the first central banks in the world to go over to an explicit money-supply policy. Over the long run, the quantity of money is expanded approximately in step with the growth rate of real Aggregate demand. As far as necessary to absorb foreign trade disturbances, short-term deviations from the long-term growth trend are made. The quantity of money is controlled by changes in the monetary base. On average, in the first three years of money-supply policy the quantity of money has been successfully expanded in conformity with the objectives, stable prices have been reattained and the adverse consequences of the preceding inflation have been remedied. These successes argue in favour of continuing with money-supply policy.
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de Strycker, Cecil
âBelgian Monetary Policy over the Past Ten Years â
In the course of the past ten years, Belgian monetary policy has undoubtedly contributed towards stabilization of the business cycle and the value of money. Its measures aimed at promoting a trend of indebtedness which matched the savings of firms and private persons and counteracted destabilizing capital flows to foreign countries. On account of the ever more complex situation, which was attributable primarily to the acceleration of price increases, partly due to higher production costs, and to the profound changes in the international monetary system, the monetary authorities modified their monetary policy measures.
Interest rate policy, the main instrument used in the past, was based more and more on foreign trade equilibrium. To enable the central bank to exert greater influence on the borrowing of firms and private households, its array of instruments was expanded. To permit control of the credit offered, the possibilities for the banks to take recourse to the central bank (lender of last resort) were restricted, or the banks were required to freeze part of their available funds (minimum reserve requirement). Over and above this, at certain times the conditions for credit expansion were laid down. Lastly, foreign exchange control by way of a double foreign exchange market (controlled and free market) proved an effective means of combatting certain capital movements.
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Crockett, Andrew D. and Heller, Robert H.
âThe Changing Role of the International Monetary Fundâ
Recent years have seen fundamental changes in the international monetary system. Consequently, there has been a substantial evolution in the role of International Monetary Fund. This paper reviews these changes in the Fund's mission as they relate to the exchange rate system and the Provision of international liquidity.
Under the second Amendment to the Articles of Agreement, Fund member countries have the right to adopt exchange arrangements of their own choice, while at the same time the Fund's responsibilities of supervision over exchange rates are broadened. The paper traces the development of the Fund's role under the Bretton Woods par value system via the guidelines to floating to the new Article IV and the agreed upon principles and procedures of surveillance over exchange rate practices.
With respect to international liquidity, the Fund's role was initially restricted to the Provision of conditional borrowing rights. Since then several arrangements were adopted that considerably broadened the Fund's role in the area of international liquidity. The Fund has created a whole range of special credit facilities designed to meet the diverse needs of member countries and the creation of the SDR marked a major advance as it resulted in the Provision of unconditional liquidity to the system.
Finally, it is argued that the issues of effective balance of payments adjustment and the Provision and control of international liquidity are intimately linked. It is here that the Fund's expanded powers of surveillance will play an increasingly important role in the future.
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Zis, George
âA Note on "The Existence of a World Demand for Money Function: Preliminary Results"â
This note argues that the empirical results presented by Frowen and Kouris, contrary to what they allege, are not "in contrast to those in the paper by Gray, Ward and Zis, which found the demand-for-money function to be stable and to show a low, insignificant interest elasticity". The absence of comparability between the two sets of empirical results stems from the fact that these two studies tested two different hypotheses. In employing the estimating technique which they did, Frowen and Kouris constrained the national income and interest elasticities of the demand for money to be identical. Thus their empirical results are neither comparable to those of Gray, Ward and Zis nor consistent with the theory of the demand for money.
Further, this note argues that the absence of a stable world demand for money function, when exchange rates are fixed, does not necessarily imply that national demand for money functions are not stable. Finally, it is pointed out that the existence of a stable demand for money function, whether or not it is interest elastic, is a necessary and sufficient condition for control of the money supply growth to ensure the control of price inflation.
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Neumann, Manfred J.M.
âNeutralizing Capital Movements - An appraisal of the German evidenceâ
According to Ricardo's law, fixed exchange rates and completely integrated capital markets prevent the monetary authorities of a small, open economy from pursuing an independent monetary policy. Interest-rate-induced capital movements completely neutralize any monetary policy action. This article examines German experience during the sixties. It is shown that the findings of previous studies, which suggested a relatively high degree of neuralization, are inaccurate. The evidence presented reveals that not more than about 50 per cent of the autonomous changes in the German monetary base were neutralized by interest-rate-induced capital movements in the same quarter.
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Rousslang, Donald J.
âShort-Term International Capital Flows and the Effectiveness Monetary Policy in an Open Economy: The German Caseâ
This paper develops a model to determine the ability of the monetary authorities of an open economy to exercise discretionary control over the domestic monetary base under a system of fixed exchange rates. A reduced form equation is derived from the model and is used to estimate directly the effects on capital flows of policy actions which consist of changes in the domestic reserve base. The model uses the assumption that, in a period of short-run financial market equilibrium, a change in domestic excess demand for credit, caused by a change in bank reserves, results in capital flows as domestic residents make substitutions between foreign and domestic financial assets or liabilities in their bond portfolios. These adjustments of domestic bond portfolios are assumed to occur before adjustments among bonds, money and commodities.
The model is applied to the German economy for the period from November 1962 through May 1971 after which Germany adopted a floating exchange rate. Monthly data are used in the empirical application of the model. Since an important tool of German monetary policy, changes in reserve requirements, are instituted only on the first day of the month, the use of monthly data helps resolve the problem of simultaneous-equations bias between policy-induced changes in the monetary base and the resulting short-term capital flows. Monthly data also provides better evidence than quarterly data as regards the direction of causality between capital flows and policy-induced changes in the monetary base.
The empirical results of this paper indicate that the reactions of short-term international flows to policy-induced changes in the monetary base are substantially completed within the month, and that such capital flows react to offset at most 57 to 59 percent of policy-induced changes in the monetary base. Since the offset is not complete, short-term international capital flows did not prevent the German monetary authorities from pursuing an independent monetary policy under a system of fixed exchange rates, though it is possible that occasional exchange rate parity adjustments were necessary if this independence was to be maintained when there were widespread expectations of a shift in parity.
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Läufer, Nikolaus K. A.
âUncertainty, Friedmanâs Rule and Optimal Stabilization Policyâ
A broad version of Friedman's rule is incorporated systematically in the Tinbergen-Theil-Brainard approach to optimal stabilization policy: Not long lags, but very high parameter uncertainty is needed in order than an optimal stabilization policy decision rule in accordance with control theory can agree with or come very close to the Friedman rule. Uncertainty in the theory and hitherto still largely neglected learning processes of economic entities force the already, existing parameter uncertainty up to such extreme heighs that Friedman's rule can be accepted as directly optimal under control theory or, on econometric grounds, as the best among the unavoidably sub-optimal decision rules.
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Voigt, Fritz and Grunwald, Jorg-Günther
âOn the Monetary Situation of the Developing Countries - Possibilities and limits of Stabilizationâ
The monetary problem of the developing countries lies in the now already chronic balance-of-payments deficits. Their chief determinants are of both a structural nature (e. g. monocultures, complementary structures, inadequate infrastructure) and a monetary nature (e. g. inflationary trend).
On account of the only limited available stock of currency reserves, the need to adjust and restore foreign trade equilibrium is becoming ever more urgent. In this connection, a fundamental distinction must be drawn between :
- long-range possibilities of stabilization, e. g. transfer of technology to developing countries, strengthening of their export capacity to improve the infrastructure, Generation of "trust" that permits private investors to import capital and re-invest profits in the country, etc., and
- short-range possibilities of stabilization, which are suitable only for bridging momentary balance-of-payments difficulties and therefore must not replace a long-range restructurization process in the developing countries (but also in the industrial countries). These possibilities include in particular the credit facilities of the IMF, the allocation of special drawing rights (and their link with development aid), the role of the exchange rate, the formation of raw material producers cartels and, lastly, the methods proposed for export price and export earnings stabilization.
The report reaches the conclusion that in international monetary policy- despite the many possibilities available for short-term remedying of liquidity bottlenecks - only symptoms will be treated as long as countries with chronic deficits have not been completely integrated into the overall economic process. At present, solutions are still often frustrated by "technical and economic operationality" and "political acceptance" of the proposed reform efforts. Hence, there will continue to be more or less strong monetary turbulence in the future, too.
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