KREDIT und KAPITAL - Issue 3/1993


Contents


Articles

Von Furstenberg, George M.
External Dept Buyback: Second Too Much

Clausen, Volker
Fiskalpolitik und Wechselkursovershooting

Hackl, Franz
Finanzinnovationen und die LM-Kurve

Bitz, Michael and Oehler, Andreas
Überlegungen zu einer verhaltenswissenschaftlich fundierten Kapitalmarktforschung - Ein Erklärungsansatz zum Anlegerverhalten (Teil II)

Breuer, Ralf and Skaruppe, Martin
Bankkalkulation als Marktproblem (Teil II)


Reports

Duijm, Bernhard
Die Bindung des Wechselkurses an das Sonderziehungsrecht - Ein Rückblick


Book Reviews

Über den Versuch, den wissenschaftlichen Tenor eines Buches zu ignorieren und es dennoch zu (re)zensieren. Ein Kommentar zu Wilhelms Rezensionen (Otto Loistl)

Klump, Rainer
Geld, Währungssysteme und optimales Wachstum (Jochen Michaelis)

Peschutter, Gudrun
Geldpolitik bei multipler Zielsetzung (Thomas Lord)


Summaries

Von Furstenberg, George M.
"External Debt Buyback: Scorned Too Much"

Heavily-indebted developing countries that had lost access to voluntary international financing in the 1980s have been granted various forms of debt relief while also considering, and sometimes executing, repurchases of their foreign debt at deep discounts. While it is true that debt forgiveness or grants for repurchasing foreign debt will reduce that discount, debt buyback need have no such effect. The reason is that the application of international reserves, which serve as a country's implicit collateral against external debt, to debt buyback reduces the value of the assets, and of all possible outcomes, left for international creditors. Hence the market discount on their remaining claims may either rise or fall depending on the closeness of the collateral relationship between liquid official foreign assets and less liquid foreign debt. This finding, demonstrated with rigor, refutes the claim, made in Krugman and Obstfeld's widely-used textbook, that a self -financed debt buyback hurts the debtor country and benefits its creditors generally. It would do so by driving up the price, i. e., lowering the discount from par, of the debt that remains outstanding. Since the opposite may occur under conditions defined in the paper, categorical policy advice, for debtor countries to avoid buybacks, is unfounded.

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Clausen, Volker
"Fiscal Policy and Exchange-Rate Overshooting"

This paper demonstrates on the basis of a modified (Dornbusch 1976) model with real income levels determined by short-term demand and with a nominal monetary demand level dependent upon the consumer price index that substantial exchange rate fluctuations may be caused by fiscal impulses in both the long and the short terms. Exchange-rate overshooting in the short term occurs whenever the interest rate response is normal, i.e. when the level of domestic interest rises after a period of expansionary fiscal policy. It is shown that the long-term exchange rate effects of an expansionary fiscal policy course depend strongly on the respective combination of structural parameters. These effects have hitherto been neglected in the analyses made, which focused exclusively on the short-term fluctuations around an equilibrium value not yet examined in detail. It is also demonstrated that there may be a tradeoff between the short-term and the long-term exchange-rate variability under certain circumstances.

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Hackl, Franz
"Financial Innovations and the LM Curve"

This contribution discusses implications of product innovations for the money market: in the case of innovative financing options representing in alternative to money, the demand for money becomes more interest-elastic and the LM curve thus flatter. On the other hand, the interest-rate elasticity increases with innovative products that take the form of money with interest paid, which makes the LM curve steeper. The implications for the supply-side of the money market depend on how portfolios are restructured after the product innovation has been launched. In the event that the financial innovation results in a restructuring of portfolios with a shift from money to innovative instruments, the money-creation multiplier would decrease with an option that represents an alternative to money, whilst this multiplier would remain constant with an instrument that takes the form of money with interest paid. Where the innovative product is financed within the framework of restructuring portfolios using forms of investment alternative to money, it is not possible to say with any degree of reliability in the case of financial innovations alternative to money what the changes in the money-creation multiplier would be; in the case of innovative financing instruments taking the form of money with interest paid the money-creation multiplier would increase.

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Bitz, Michael and Oehler, Andreas
"Überlegungen zu einer verhaltenswissenschaftlich fundierten Kapitalmarktforschung - Ein Erklärungsansatz zum Anlegerverhalten (Teil II)"

The second part of the article deals with the second group of determinants of private investor behavior, the person of the investor himself. The considerations differentiate between determinants of the personal disposition like emotional, motivational or cognitive determinants (e. g. the degree to which a private investor is influenced by others) and the personal situation described by sociodemographic (e. g. age, sex) and socioeconomic characteristics (e. g. income, wealth, life cycle, profession).

The conceptual considerations are illustrated by some more 1992 survey results.

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Breuer, Ralf and Skaruppe, Martin
"Banking Calculation as a Market Problem"

The first part of this contribution deals with the theoretical bases of the market interest method and with a conceptual approach to identifying the criteria that would allow alternative portfolios to be developed. The second part analyzes the effects of different approaches to constructing alternative transactions in specific decision-making situations in retail banking, e. g loan redemption ahead of schedule. It turns out that the redemption debt can only be calculated through a consistent use of alternative transactions based on congruent redemption terms, i. e. by allowing lenders and borrowers to make economically rational decisions on whether to serve and, respectively, accept notice of termination.

It turns out on the basis of analyses of the congruence criteria suggested in the specialized literature and of the implications of such criteria for the decision-Making processes of lenders and borrowers that the way pursued in financial theory, i.e. to use duplicates with congruent redemption terms as evaluation basis, would seem to be appropriate also in banking calculation. Financial market innovations and a speedy development of evaluation models will allow ever more complex payment flows to be duplicated and evaluated. Notwithstanding the need to take account of the internal cost situation when the interest business is calculated, the growing competitive pressure will lead to a situation in which customers increasingly compare lending terms and conditions. The market interest method is undoubtedly appropriate to do justice to such consumer behaviour provided that it is further developed to mee precisely this purpose.

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Reports

Duijm, Bernhard
"Ties between the Exchange Rate and the Special Drawing Right "

A general float of exchange rates has led to greater instability of the weighted external value of many countries' currency especially where it is related to non-basket currencies. As an exchange-rate policy alternative, many countries have opted in favour of making their currency a basket currency in order to effectively stabilize their exchange rates thereby. Since the IMF Special Drawing Right (SDR) is a currency basket-based monetary unit, it lends itself as a reference basis for fixing exchange rates. Before the early 1980s, the SDR was of certain importance as a basis on which to fix exchange rates. Inspite of the IMF's efforts to strengthen the monetary function of the SDR, a rising number of countries are now turning their backs on ties between their currency and the SDR and showing a preference for different exchange-rate regimes.

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