KREDIT und KAPITAL - Issue 1/1981


Contents


Articles

Rudolf Stucken zum 90. Geburtstag

Ehrlicher, Werner
Zukunftsprobleme unserer Wirtschaft

Pippenger, John
The Nature of the Theoretical Debate about Monetarism

Zippel, Wulfdiether
Zur langfristigen Instabilität einer Gold-Reservewährungs-Ordnung

Schanz, Gerhard
Wäre die Einbeziehung der Versicherungswirtschaft in die Mindestreservepolitik kredittheoretisch gerechtfertigt?

Müller, Norbert
Ökonomische Macht sozialer Gruppen und Inflation

Rudolph, Bernd
Ein dynamisches Modell der Kreditbeziehungen zwischen einer Bank und ihren Kreditnehmern

Eilenberger, Guido
Wachsende Geschäftsvolumina als Problem der Unternehmenspolitik von Banken


Reports

Welcker, Johannes
Technische Analyse durch Computertest bestätigt – Random Walk Theorie widerlegt


Book Reviews

Kromphardt/ Clever/ Klippert
Methoden der Wirtschafts- und Sozialwissenschaften – Eine wissenschaftskritische Einführung
(Karl-Heinz Dignas)


Summaries

Ehrlicher, Werner
“Future Problems of Our Economy“

Pessimistic forecasts infer from the persistent increase in population and the threatening exhaustion of reserves of natural resources that there are limits to economic growth. In this article, therefore - following some fundamental reasoning on the potentialities of and limits to futurology - the question is raised of whether the exponential population growth in the past 300 years will continue; the author reaches the conclusion that at present clear trends can be observed, which speak for a change in population development. The study centres around the future development of the production structure; the thesis is advanced that the further development of the world economy will be governed by mutual complementation as between the industrial countries and the underdeveloped countries. In underdeveloped countries - if the historical pattern of the present industrial countries is followed - it can be expected that the high proportion of agricultural production will give way to expansion of industry and the services sector. For the industrial countries, the decisive factors will lie in the necessity to develop substitute energies, to shift production to capital-intensive fields with high research expenditure, to automate medium and small plants with micro-processors, to further intensify telecommunication and to increase the supply of services in the field of science and research on the one hand, and the health and recreation sectors on the other. These developments will result in the discoveries of science in the postindustrial age becoming the dominating production factor in technology, the administration and politics. In conclusion, attention is focussed on what is probably the most difficult problem of the future, i. e., the political safeguarding of the international division of labour and hence of access to the vital raw material markets, and the creation of a world monetary system which ensures the stability of an international monetary unit.

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Pippenger, John
”The Nature of the Theoretical Debate about Monetarism”

There is a widespread belief, clearly stated by Benjamin Friedman [1978],that there is no theoretical debate over monetarism. The issues separating monetarists and Keynesians are empirical rather than theoretical. The position taken here is that there is a theoretical debate, but the important theoretical issues are excluded by standard macro models because they assume continuous monetary equilibrium.

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Zippel, Wulfdiether
“On the Long-term Instability of a Gold-Reserve Currency System“

Here the attempt has been made to derive information on whether and to what extent there is a sound basis for the traditional view that for the collapse due to mistrust of an international monetary order organized in accordance with the Bretton Woods concept it is sufficient for the short-term foreign liabilities of a reserve currency country to begin to exceed its freely available stock of international liquidity (gold). It proves that this traditional hypothesis must be revised. The onset of a crisis due to mistrust which can no longer be kept under control is not linked up with any specific debt-gold stock ratio of the issuing country of a reserve currency. The number of central banks and the "size" of national economies behind them, on which the main burden of financing the balance-of-payments deficits of the reserve currency country falls, exert a strong influence on the probability of extensive conversion-proneness and hence a general loss of confidence. The experience gathered since 1950 and theoretical considerations indicate that the collapse of a gold-reserve currency system due to mistrust can no longer be obviated only when two factors coincide. This situation is given when the balance of trade of the reserve currency country begins to run downhill into a prolonged and marked deficit, and at the same time the reserve currency country is far from being in a position to convert its short-term foreign liabilities at the prevailing parity rate into other reserve assets (gold).

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Schanz, Gerhard
„Can Credit Theory Justify the Inclusion of the Insurance Business in Minimum Reserves Policy?“

At the beginning of the nineteen-seventies, there was some discussion on supplementing the Instruments of the German Bundesbank with minimum reserves on assets of the banking institutions. A departmental draft envisaged extension of such a minimum reserves requirement to all institutions covered by Sect. 1, Banking Act, that is, also insurance firms. This approach, which was motivated by stabilization policy considerations, was followed in autumn 1977 by one of a structural policy nature (investment control) at the party congress of the SPD in Hamburg. This article deals with the question of whether inclusion of the insurance business in minimum reserves policy would be justified in the light of its systematic make-up. The issue is whether the insurers take part in multiple credit formation and whether they contribute in restrictive phases towards increasing the circulation velocity of money. The article reaches the conclusion that the credit multiplier is not perceptibly greater than zero in the case of the insurance business, that the latter therefore does not participate in multiple credit formation, and that with respect to capital formation and credit-granting by insurers tangible relationships with cyclical influences are lacking and hence also any procyclical influence on the velocity of circulation. The inclusion of the insurance business in minimum reserves policy would thus be inimical to the system.

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Müller, Norbert
„Economic Power of Social Groups and Inflation“

According to the central thesis of the aspiration theory of inflation, the interests of economic units are directed mainly towards increasing, or at least defending, their shares in the national product. The distribution struggle takes place in the economic process on the market and in the political process by exertion of influence on those responsible for economic policy. The conflicts are fought out within the framework of wage-negotiation autonomy, under conditions of increasing concentration on the markets and far-reaching government guarantees of full employment, and in situations of relatively elastic supply of money and credit. This Constellation allows the actors strategies aimed at changing the existing distribution relations, but resulting in inflationary trends.

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Rudolph, Bernd
„A Dynamic Model of Credit Relations between a Bank its Borrowers“

The object of the article is to show that for lenders it may prove rational in certain situations to prolong credit commitments and/or increase the amounts involved, although the resulting credit positions are more risky than would be Consonant with the average security requirements (creditnorms) of the bank with respect to its lendings. The additional credit would be impermissible in the view of the bank, i.e., the borrower would not be creditworthy, if credit claims against the borrower in question had not been built up in the previous periods. It may be impermissible in the view of any other bank with the same expectations and the same attitude to risks, if such other bank has not hitherto entered into credit relations with the borrower in question. The possible behaviour of the bank in trying to save dubious credits by granting additional credits, or throwing good money after bad, is demonstrated with the help of a simple, dynamic model of the credit-granting decision process. Simultaneously this model serves to bring out some important determinants of lender-borrower relations, which may favour such behaviour. Over and above this, the model gives occasion to draw attention to instruments which banks can use to avoid in later phases of credit relations situations in which they may be constrained to resort to an ex ante unintended prolongation or increase of their credit.

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Eilenberger, Guido
„Growing Business Volumes as a Problem of Bank Management Policy“

In the past, banks have responded to growing business volumes (as an expression of growing firm sizes) by engaging additional personnel, which necessarily entailed corresponding increases in personnel costs. But since, on the other hand, there are more or less narrow limits to the covering of such additional costs - not the least reason being the changing macroeconomic conditions - by way of higher charges and prices, it would seem advisable to consider how rising business volumes can be coped with efficiently, especially with regard to the personnel sector. In view of the peculiarities of bank production activities and the essential determinants of personnel costs, above all organizational measures must be taken into consideration for solving the problem of restricted decision capacity and the problem of the optimum range of control. As a consequence for the make-up of bank organizational structures it follows that the introduction of novel organizational forms cannot be regarded as the sole and permanently effective therapy. Instead, constant observation is necessary of the development of personnel effectiveness (ratio of personnel costs to output) as a nearly warning indicator and an internal standard of comparison within the banking business. For the success of management policy action in this area, it is of decisive importance to reduce the number of organizational decisions relative to the number of subject-matter decisions and to level off bank hierarchies. Any effort in this direction, however, requires that also in banks methodical approaches be used to limit the rise of personnel costs, as is already the case in other lines of business.

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Reports

Welcker, Johannes
„Technical Analysis Confirmed by Computer Test - Random Walk Theory Refuted“

Hockmann has set up an experiment to test technical analysis. He tests point & figure analysis. He proceeds in the following manner: he buys a share as soon as there is a buy signal, he holds it until there is a sell signal, from then on he holds cash until there is a buy signal again. The test is conducted by a computer. Therefore it is free of any subjective movements. The test is conducted with extreme methodical precision. The result is that a strategy according to the rules of point & figure analysis yields more profit than a buy & hold strategy. The general refusal of technical analysis in the scientific literature up to now can be attributed to false and misleading tests. In the literature on the random walk theory the hypothesis has been extensively tested whether changes in share prices of a certain period depend on changes in share prices of the previous period. The results were negative for periods of more than two days. But this does not test technical analysis, since technical analysis does not postulate such a dependence. Levy's test too is in truth no test of technical analysis. Levy's "formations" are not identical with those of technical analysis. Furthermore Levy calculates the results of the investment always for a certain period after there has been a buy or sell signal. This procedure does not conform to technical analysis, since technical analysis does not recommend holding or not holding a share for a certain period but from signal to signal.

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