Fand, David J.
Geldtheorie und ökonometrische Großmodelle
Möller, Walter and Vogl, Gerald and Woll, Artur
Moderne Quantitäts- versus Liquiditätstheorie: Ein Test konkurrierender Hypothesen
Siebke, Jürgen and Willms, Manfred
Zinsniveau, Geldpolitik und Inflation
"Window-dressing" in Bankbilanzen
Kreditorganisation in der Sozialistischen Republik Rumänien
Die Fusion der Girozentralen in Nordrhein-Westfalen (Lutz R. Raettig)
Börsenorganisation zum Schutze der Anleger (Manfred Steyer)
Fand, David J.
"Monetary Theory and Large-Scale Econometric Models"
In the past decade, a large number of macroeconomic, large-scale econometric models have been conceived in the U.S.A., which have had considerable influence on the analysis of economic development and the framing of economic policy. In this connection special interest has been shown of late in the question of what hypotheses on the transmission of monetary impulses to real economic magnitudes have been introduced into those models. This interest resulted above all from the fact that the forecasts made with the large-scale models were in part rather unsatisfactory, and the economic policy strategy derived from them proved not very successful, especially with regard to combating inflation. The line taken by the author is that the unsatisfactory efficiency of the large-scale models is decisively attributable to the fact that in their construction more recent findings in monetary theory were not given sufficient consideration.
The first part of the study depicts important theoretical characteristics of nine large-scale econometric models. All the models are conceived with a strong leaning towards Keynesian income-expenditure theory, i. e., the nominal interest rates are assigned a central transmission function, while conceptions of quantity theory have been given hardly any consideration. This finds expression in some of the models primarily in the fact that the monetary base, currency in circulation, demand and time deposits are either not included in the model at all or are treated as endogenous variables, i. e., they are not assigned any monetary function. Other models work with inadequately specified wealth calculations, or certain price levels and nominal wages of an exogenous character.
In the second part the author ventilates the methodology of the applied econometric estimating procedures. In this connection he makes reference to the controversy between the proponents of the structural equations on which estimation is based in the large-scale models and the monetarists, who prefer direct estimations by way of equations in reduced form. In this context attention is drawn to the special problems which arise when it is desired to determine the relative efficiency of monetary or fiscal policy measures with the aid of one of the two methods. In the author's view, a decisive point for the different assessment of this question is the correct determination of exogenous and endogenous variables, and adequate consideration of the important channels of action of monetary and fiscal policy.
The third part shows that mispredictions and economic policy mistakes made in recent times are primarily due to the fact that faulty monetary-theory conceptions had a decisive influence on the construction of the large-scale models. For example, the significance of changes in the growth of the quantity of money for the inflation rate was not recognized and the influence of inflation expectations on the level of the nominal interest rates was not taken into account. A further important aspect is the failure to distinguish between nominal and real values, and between the volume of money and the credit volume. So consideration of these problems seems absolutely necessary for the improvement of the forecasting efficiency of large-scale models.
Möller, Walter and Vogl, Gerald and Woll, Artur
"Modern Quantity Versus Liquidity Theory - A Test of Rival Hypotheses"
The foregoing study sets out to assess the information content of monetaristic and liquidity-theory concepts for the Federal Republic of Germany. For both concepts tests are made of rival hypotheses, which were taken over by Köhler. Computations were based on seasonally adjusted, quarterly figures for the period from the first quarter, 1960, to the fourth quarter,1968.
The test functions of the theses and counter theses give no satisfactory results, if correlation coefficients are used as a measure of connection between variables, and Durbin-Watsen coefficients for autocorrelation. On the other hand, a comparison of the results for the rival hypotheses permits the conclusion that the monetaristic concept is superior. In particular, the rough trend can be indicated by the following statements:
- the quantity of money, and not the balance of liquidity, must be ascribed the greater significance as a monetary variable;
- the direction of influence is from the quantity of money to nominal aggregate demand, and not vice versa;
- the German Bundesbank was relatively successful in controlling the monetary supply process.
Siebke, Jürgen and Willms, Manfred
"Interest Rates, Monetary Policy and Inflation"
The importance of the study lies in the fact that, in addition to bank liquidity, the interest level is a significant indicator for judgment of monetary developments and the effects of monetary policy decisions. A high interest level is regarded as synonymous with a restrictive phase and a low interest level as synonymous with an expansive phase. The interrelationship presupposed by this interpretation of the interest level as an indicator is given only when monetary policy measures have a dominant influence on interest level changes. It is no longer extant when the trend in the demand for credit exerts the dominant influence on changes in the interest level.
Superimposed on the influence of monetary policy measures and the path of credit demand on the interest level are the expectations of economic units as to future price trends. Economic entities derive their expectations from their experience with past price trends, i. c., for the recent past from the inflation rate. Empirical studies confirm the existence of the three effects mentioned. The height of the interest level for the medium term is dependent first and foremost on price expectations. These results are based on application of the ALMON method. In the Federal Republic of Germany, the long-term interest rate rises over the course of time by 80 to 85 % of the expected inflation rate. For example, an expected 5 % price increase rate causes an absolute increase of 4 to 4 1/4 % in the interest rate. Half of the price expectation effect is transmitted as early as in the first 6 to 7 months. It has taken full effect in about 2 years.
The real interest rate corresponds to the difference between the observed nominal interest rate and the expected inflation rate. The real interest in the Federal Republik of Germany is at a level of 5 % and fluctuates only within narrow limits.
"Window-dressing in Bank Balance Sheets"
Window-dressing is the term used for the long-established practice of banks of influencing the amounts shown for certain items in their balance sheets by measures undertaken specifically to "doctor" balance sheets and hence geared to key-dates. In the narrower sense, window-dressing means manipulation of credit balances with the central bank motivated by balance-sheet policy. The cause of this window-dressing is the desire of the banks to present that section of the public which is interested in their balance sheets with as favourable a picture as possible of their liquidity. Moreover, window-dressing may have the effect of raising the balance-sheet total and hence induce "growth", and may also contribute towards stabilization of the curves showing development of central bank credit balances and balance-sheet totals over the course of several years. Window-dressing is derived directly from the business policy objective of status sustainment.
This article subjects the window-dressing hypothesis to an empirical test, using the annual statements of banks in the Federal Republic of Germany since 1963. For this study, not only the strategies practiced by the banks in the course of the month to fulfil their minimum reserve obligations were analysed, but also the interest rates paid on the money market on the balance-sheet key-date. When the banks are considered as a whole, it proves that at the end of the year they have comparatively high credit balances with the central bank, which can only be explained by the window-dressing hypothesis. A study of the most important five groups of banks further showed that four of them indulge in more or less marked window-dressing. Only the savings banks refrain from window-dressing.
"The Credit Organization in the Socialist Republic of Roumania"
For Roumania, the end of the war in August 1944 brought far reaching changes in the economic, financial and political field, among other things the nationalization of the national bank, the banks, firms and real property. Following various reforms, the national bank was given new statutes in 1955. One of the first banks founded after the national bank was the Roumanian investment bank (Banca romana de Investitie). Agriculture and the food industry are financed through the bank for agriculture. For all private savings and deposit business there is a central savings bank (Casa de Economiesi Consemnatinuie). For settling payments and exchange transactions with foreign countries and implementing exchange control, the bank for foreign trade (Banca romina de Comert exterior) was established.