Contents

Articles

*Schmid, Alfons
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Postkeynesianische Ökonomie

*König, Heinz and Gaab, W. and Wolters, J.
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Probleme der Modellierung der Zinsstruktur in makroökonometrischen Modellen

*Zis, George
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Towards a Politico-economic Analysis of Inflation

*Steindl, Frank G.
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Inflation and Unappreciated Interest

*Tavlas, George S.
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Economic Policy Effectiveness in Hicksian Analysis: An Extension

*Schulz, Heino
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Zur Aussagefähigkeit der Zentralbankgeldmenge als Indikator im geldpolitischen Konzept der Deutschen Bundesbank

*Vital, Christian
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Geldnachfragegleichungen für die Schweiz

(Wim Kösters)

*Spree, Reinhard
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Wachstumstrends und Konjunkturzyklen in der deutschen Wirtschaft von 1820 bis 1913

(Werner Glastetter)

*Dieckheuer, Gustav
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Staatsverschuldung und wirtschaftliche Stabilisierung. Eine theoretische Analyse und eine ökonometrische Studie für die Bundesrepublik Deutschland

(Dieter Duwendag)

*Carreau/ Flory/ Juilard
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Droit International Economique

(Albrecht Weber)

*Kohler, Reinhard
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Grenzen der Bundesbankpolitik. Wirkungsanalyse restriktiver Zentralbankpolitik 1959-1974

(Hans-Peter Basler)

*Schmid, Alfons
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Post-Keynesian Economics

Post-Keynesianism attempts to substantiate its own particular approach to economies. The object is to achieve this intention by further development of Keynesian macroeconomics and the elaboration of a "Keynesian microeconomics".
The central point of Departure is accentuation of the dominant position of the oligopolistic sector. This implies autonomy of investments and hence exogenous determination of the accumulation and profit rate. Endogenous variables are the degree of capacity utilization and the payroll-costs ratio. The mercantile power of the oligopoly makes it possible, via an autonomous price policy, to set up an internal fund serving to finance investments. Here the main emphasis is on mark-up pricing.
On account of the long-range orientation of the oligopoly, expectations are of special significance. They govern the development of normal conceptions as to capacity utilization, price etc. This sort of normal conception forms the basis for analysis of business trends. Post-Keynesianism has developed no completely elaborated theory and policy as yet. It still considers itself to be a research programme. Consequently, for certain spheres, e. g. monetary theory, up to now there are only rudimentary drafts, so that for economic policy, too, no definitively formulated conceptions can be presented as yet. On the whole, post-Keynesianism is a promising approach to the analysis of real economic processes.

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*König, Heinz and Gaab, W. and Wolters, J.
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Problems of Modelling lnterest Rate Structures in Macroeconometric Models

In econometric models, the modelling of the interest rate structure is of special significance for the modus operandi of monetary policy measures. For such modelling we have, in principle, the three following approaches:(i) the market equilibrium hypothesis: short- and long-term interest rates are determined via specification of the supply and demand sides of the relevant financial market; (ii) the expectation hypothesis of the interest rate structure: The long-term interest rate is a weighted average of the effective short-term interest rates in the past, and (iii) the hypothesis of efficient markets. The best predictor for the long-term interest rate is either the effective rate in the preceding period or, the short-term interest rate prevailing at the beginning of the period plus a liquidity premium. Since the examination of the individual hypotheses without allowing for simultaneous relationships has disadvantages, each hypothesis for the interest rate structure is taken into account explicitly in a model for the financial sector of the Federal Republic of Germany. The object of. the study is to single out, taking all structural relationships of the model into account, that hypothesis relating to the long-term interest rate which is most compatible with the observed dynamic relationships. The effects of the various hypotheses on the dynamic structure of the model are assessed an the bases of the characteristic values of the deterministic system and with the help of spectral analysis. The methodological procedure is described in the appendix. It proves - with some reservations - that the expectation hypothesis corresponds mostly closely to the observed relationships.

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*Zis, George
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Towards a Politico-Economic Analysis of Inflation

Increasing acceptance of the proposition that "money matters" and, therefore, that control of the money supply growth rate is necessary, though not necessarily sufficient for the control of the rate of Inflation has been accompanied by a growing interest in the determinants of countries' monetary policies. This paper surveys a number of studies which have sought to analyse the determinants of inflation in broad politico-economic terms. It is observed that these studies treat Inflation as an essentially national phenomenon. Therefore, they cannot provide an adequate foundation for an explanation of the convergence, and divergence since 1973, of the major countries' inflation rates. An attempt is made to modify Gordon's study to apply for an open economy. It is argued that a politico-economic theory of inflation should explain why countries adopted the international monetary arrangements which have prevailed since 1945 and, that fixity of exchange rates combined with the use of an international asset, such as the S.D.R. or E.C.U., would facilitate success in governments' efforts to stabilize or reduce the rate of inflation.

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*Steindl, Frank G.
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Inflation and Unappreciated Interest

This paper develops a multiperiod Fisherian model in which the nominal rate of interest rises by less than the current expected rate of inflation in the presence of complete, instantaneous adjustment in the loanable funds market. Basic to the model is the motion of different time rates of expected inflation.
The behavior of the nominal rate of interest when price expectations may be different in various periods is the central problem considered. In such a case, the analytic expression of the nominal rate is more complex than the famous Fisherian. The relation between the nominal and real rate is shown to depend on the moderation, constancy or exacerbation of price expectations. In particular, the model establishes that the nominal rate of interest rises by less than the present anticipated rate of inflation if future Inflation rates are expected to moderate. In the special case where a constant rate of Inflation is anticipated, the expression for the nominal rate of interest reduces to the famous Fisherian equation.
The paper then presents the results of an attempt to measure the course of inflationary expectations in order to assess the plausibility of the model. The implicit forward rates in the observed term structure are used. Declining forward rates are shown to imply expectations of declining rates of inflation. For monthly term structure data averaged over the business cycle, the evidence indicates that inflationary expectations are moderating.

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*Tavlas, George S.
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Economic Policy Effectiveness in Hicksian Analysis: An Extension

The speed with which macro policies exert their impact upon economic activity is a key consideration in current policy discussion. As Blinder and Solow argue: "The main issues of [macro] econometric debate for the near future appear to be over timing" [l, 88]. This note has considered the policy implications of two upward-sloping IS curve' models which have appeared in the literature. Specifically, it has been shown that the interest elasticity of the demand for money -or the slope of the LM curve - involves differing consequences for the timing aspect of each model and the respective ability of each model to absorb exogenous shocks. Therefore should empirical evidence suggest that in the real world the IS curve slopes upward, it is important to identify the underlying mechanism. Finally, it has also been demonstrated that in a Cebula-type model the role of monetary policy would be limited to adjusting the money supply in a manner which pegs the interest rate at a certain level.

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*Schulz, Heino
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On the Evidentiary Value of the Quantity of Central Bank Money as an lndicator in the Monetary Policy Concept of the German Bundesbank

Since 1973, the German Bundesbank has been using a new aggregate, the quantity of central bank money (QCBM), as an intermediate target and indicator magnitude. This article examines the hitherto neglected question of whether this magnitude can perform both functions simultaneously or whether it is not more likely that use of the QCBM as an intermediate target, as envisaged in the Bundesbank's monetary-policy control concept, does not impair decisively its suitability as an indicator.
As the intermediate target magnitude QCBM is also subject to influences from the non-banking sphere, it cannot, in the Bundesbank's view, be controlled direct by the central bank, but only indirectly via interest policy measures. However, interest rate policy gives signals and awakes expectations concerning the level of future interest rates.
On the basis of several examples it is shown how, in consequence of such expectations, in certain situations a policy of lowering interest rates may result in structural shifts in the quantity of money M3 or even to an exclusively interest-rate-induced increase in M3 and thus, ceteris paribus, to a greater QCBM in each case. That expansion of the QCBM, however, need not necessarily be accompanied by a corresponding expansion of book-money creation by the banks and hence of demand that affects purchasing power. On account of the varying closeness of the relationship between bank-money creation and central-bank-money creation over the course of the trade cycle, the QCBM may thus, when used as an indicator, give a greatly distorted picture of the monetary trend. Therefore, the better the QCBM can be controlled as an intermediate target with the help of interest rate policy, the greater in the risk that it will fail as an indicator.

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