Schlesinger,
Helmut
Finanzielle
Schwächepunkte der deutschen Wirtschaft
Tietzel, Manfred
Was kann
man von der "Theorie rationaler Erwartungen" rationalerweise
erwarten?
Loef,
Hans E.
Geldnachfrage
in einer offenen Volkswirtschaft: Bundesrepublik Deutschland 1970-1979
Angehrn, Beda
The Eurodollar Market and the Money Supply
Fausten, Dietrich K.
The Role of Exchange Rates. A Reconciliation of
Alternative Approaches
Neumann, Manfred J. M.
Phillips-Illusionen:
Ein Kommentar
Wilhelm, Jochen
Die Bereitschaft
der Banken zur Risikoübernahme im Kreditgeschäft
Â
Poniachek, Harvey
An Assessment of European-American Monetary
Relations
Bartling, Hartwig
Leitbilder der Wettbewerbspolitik (Reinhard Blum)
Hammann, Detlev
Zahlungsbilanz, Konjunkturtransmission und Wechselkursbestimmung (Renate
Ohr)
Bombach, G. and Gahlen, B. and Ott, A. E. (Hrsg.)
Neuere Entwicklungen in der Investitionstheorie und -politik (Charles C.
Roberts)
Schlesinger, Helmut
âWeak Financial
Points of the German Economyâ
For all its
efficiency compared to other countries, for a long time now the German economy
has exhibited clear symptoms of structural weaknesses, especially in the
financial field. One grave feature is the inadequate net assets for firms, which
have dropped within 16 years from nearly 30 % of the balance-sheet total to
about 20 %. The chief cause of inadequate net asset formation is too low
earnings of the firms. They diminish a firm's capability of strengthening its
capital basis out of its own resources and they impair the chances of procuring
risk capital on the market. The earnings of firms have been reduced not only by
foreign trade factors, particularly the two jumps in petroleum prices and the
inadequate manner in which the domestic distribution process coped with them,
but also by the rising burden of taxation, including all types of levy.
A second weak point
is the increase in short-term indebtedness relative to the total borrowings of
firms, in which connection importance attaches to interest-rate considerations,
which under certain circumstances make it seem advisable to borrow short-term
funds at high rates in the hope of being able later on to consolidate debts on
more favourable terms for longer periods. This, however, introduced additional
uncertainties into the financing structure. Low net assets and the declining
proportion of long-term borrowings made many firms more sensitive to
interest-rate changes, which play an important role especially in phases of
steeply rising interest rates, but which has also become a problem on account
of market fluctuations of interest rates in both directions over the course of
the years. Those fluctuations are, above all, an expression of greater
disequilibria at home and in the rest of the world, that is, of the higher
Inflation rates, balance-of-payments disequilibria, greater instability of
exchange rates, and growing deficits in government budgets. Smaller
interest-rate fluctuations, and hence less uncertainty in the planning data of
firms, can be achieved, if the mentioned disequilibria at home and relative to
the rest of the world can be diminished.
The remedy for the
financial weaknesses lies, of course, in improving the earning capabilities of
firms. Without sufficient earnings there can be neither adequate self-financing
nor enough incentive to provide risk capital. Over and above this, the
continuing development of our economy calls for innovative, risk investments,
which cannot be financed mainly with borrowed funds. But since these problems
will hardly be able to be solved by self-financing within the firms alone, the
question of Provision of risk capital presents itself, for which terms and
conditions would have to be improved. This means primarily: stimulation of
share issues and the foundation of (or conversion into) public companies. In
this connection it should be examined whether it is possible in the field of
taxation and with respect to issuing costs to remove some of the existing
obstacles, and whether it is generally advisable to subject profits retained by
firms for internal financing of investments, and hence of jobs, to the same
high tax rates as individual high-bracket income, which now serves as a
yardstick for the height of the corporate income tax rate and the marginal personal
income tax rates
Tietzel, Manfred
âWhat can be rationally expected of the "Theory of Rational
Expectations"? â
The "theory of rational expectations" can provide no adequate
explanation of the thesis of the impuissance of all discretionary economic
policy, to demonstrate which it was - presumably - developed.
Its premisses are unrealistic and it can therefore only show how the
situation that is to be explained possibly, but not actually, arises. Certain
information that would be necessary for rational formation of expectations can
be procured under certain circumstances; formation of uniform expectations by
all economic entities, being merely coincidental and not systematic, is
possible but highly improbable, for it cannot be presupposed that expectations
will be formed in accordance with a single "true structural model"
and it cannot be assumed that information is distributed evenly.
One of the merits of the theory is that it brings indirect cognitive
progress in that, considered in the light of the theory, rival expectation
hypotheses could be thoroughly criticized and that it drew attention to the
important role of theoretical knowledge for the formation of expectations.
Loef,
Hans E.
âThe Demand for
Money in an Open Economy : Germany 1970 - 1979â
In an open economy
with no restrictions, or only minor ones, on international capital flows and
currency holdings it seems plausible to include in the list of the opportunity
costs for holding money besides the domestic interest rates and the expected
inflation rate foreign opportunity costs as well. Foreign bonds and foreign
currencies can be considered as the most appropriate candidates to represent
foreign alternatives to domestic money holdings. Currency substitution permits
residents to keep foreign currencies while individuals abroad can hold domestic
money. Expected exchange rates and foreign interest rates therefore influence
the demand for domestic real money in an open economy. Empirical investigations
for Germany 1970 to 1979 with quarterly data provide strong evidence for these
theoretical propositions. Of special concern for the paper presented is -
besides the influence of foreign interest rates - the negative impact of the
expected inflation rate and the positive (negative) influence of an expected
appreciation (depreciation) of the home currency relative to foreign currencies
on the demand for domestic real money.
Angehrn, Beda
âThe Eurodollar Market and the Money Supplyâ
The present article analyses the role of the
Eurodollar market from the standpoint of money supply theory. First a suitably
extended money supply model is set up as a basis and then a relatively general
portfolio model. The analysis shows that fundamentally the Eurodollar market is
of an expansive nature. At the same time, it becomes clear what economic
interrelationships play a decisive role in that expansive effect. With regard
to monetary policy, the analysis makes it clear that for all the expansive
nature of the Eurodollar market the central banks have lost control over the
money supply and that minimum reserve requirements for Eurodollar deposits
would not necessarily eliminate the expansive character of the Eurodollar
market.
Fausten, Dietrich K.
âThe Role of Exchange Rates A Reconciliation of Alternative Viewsâ
The contra distinction between alternative views of the exchange rate as
the relative price of national outputs, determined in commodity markets, and as
the relative price of national monies, determined in asset markets, is
critically examined. In a correctly specified stock adjustment model nominal
exchange rates are influenced by both real and monetary disturbances.
Consequently, any suggestion that these views constitute mutually exclusive
alternatives must be rejected. On the other hand, the differential adjustment
speeds in asset and commodity markets suggest the predominance of asset market
considerations for the short-run determination of exchange rate behaviour.
Neumann, Manfred J. M.
âPhillips-Illusions: A Commentâ
The comment deals with the assertion by Holtfrerich (1982) that the
transition from fixed to flexible exchange rates induced an increase in the
short-run Phillips-trade-off. This assertion is shown to be unfounded on both,
theoretical as well as empirical grounds.
Wilhelm, Jochen
âThe Preparedness of the Banks to Assume Risks in the Credit Businessâ
The conditions under which banks are prepared to assume risks in the
credit business is a controversial issue in the scientific literature on
banking. The predominant theses are the thesis of risk-covering by way of the
interest rate - this theory can be substantiated theoretically - and the thesis
of standardization of risks - this thesis is based on observation of credit
business practice. This article first presents theoretical justifications for
the risk-covering hypothesis and shows that its consequences are irreconcilable
with the available empirical knowledge. In contrast, the study develops the
hypothesis that basically banks are interested in avoiding risks. In
justification of such conduct theoretical arguments are advanced, which are
founded on the risk sensitivity that is typical of banks. Some possible
objections are discussed, which might be based on empirically observed facts
such as credit losses and interest rate differentiation.
Reports
Poniachek, Harvey
âAn Assessment of European-American Monetary Relationsâ
European-American international monetary relations are in a state of
transition; they are inadequate, controversial, and lack both a common purpose
and formal system or institutional framework for policy coordination.
At present, a significant divergence has emerged between U.S. and
European attitudes towards narrowly defined international monetary cooperation
(i. e., exchange and interest rates). Views about broadly defined financial
relations (i. e., global monetary and financial structure, operation,
environment) are, however, less divergent. Moreover, there is a significant
inconsistency between American foreign policy and international
monetary/financial policy vis-a-vis Europe, particularly in the narrowly defined
monetary relations.
The trans-Atlantic controversy concerning foreign exchange and interest
rates remains unresolved, and the disparity between European-American monetary
relations is expected to continue in the future. Efforts aimed at eliminating
this gap or promoting common interests are neither likely nor warranted.
Therefore, the forthcoming Western Economic Summit is not expected to resolve
the U.S.-European controversy.
Finally, the outcome of the French Presidential elections has introduced
substantial uncertainty into the European Community and diminished the
prospects of the European Monetary System and its global impact. Currency
issues could pose very difficult problems for the Europeans and create a zone
of monetary instability with significant effects on intra-European flows of
trade and investment. Against this background, the reemergence of the U.S.
dollar is well underway and the question of Atlantic monetary cooperation has
become relatively insignificant for U. S. policy makers.