International Liquidity Reconsidered
Kaufmann, Hugo M.
The Deutsche Mark between the Dollar and the European Monetary System
Zum Zusammenhang zwischen Mengen- und PreisÃ¤nderungen â Betrachtungen zu einer auffallenden Trade-off-Beziehung
Langfristige StabilitÃ¤t und Wachstum in einem IS/LM-Modell mit Finanzierungsfunktion der Investitionen und Bilanzrestriktion der Unternehmen
IneffektivitÃ¤t der Wirtschaftspolitik bei ârationalen Erwartungenâ? Erwiderung zu einem Kommentar
Wall, Larry D.
Die Reform der Einlagenversicherung aus der Sicht von VersicherungstrÃ¤gern
Sawyer, Malcolm C.
Macroeconomics in Question â The Keynesian-Monetarist Orthodoxies and the Kaleckian Alternative
Die BeschÃ¤ftigungspolitik in der Bundesrepublik Deutschland 1974 â 1978
Roberts, Ch. C. und Stiepelmann, H.
ÃberprÃ¼fung der verschiedenen SchÃ¤tzungen der VermÃ¶gensverteilung in der Bundesrepublik Deutschland
âProblems of International Liquidity - the Current Viewpointâ
The chief reasons for the present ventilation of problems of international liquidity supplies are the general worry about the international debt crisis, the uneasiness about the inconstant and unpredictable development of international foreign exchange reserves and their dependence on the strength or weakness of the US dollar, and lastly the negative experience with marked and often erratic exchange rate changes. The liquidity theme is also relevant for the debate on a general reform of the present monetary "system", which some people call for. Following some definitive remarks on the concept of international liquidity, which must now be understood in a much broader sense than formerly on account of the decisive role of the international credit markets, four sets of problems are dealt with: First, an examination is made of what the formation of a multi-reserve-currency system and the growing possibilities of recourse to the international financial markets have meant for development of international liquidity supplies. In this connection, the great flexibility of liquidity supplies is emphasized. Secondly, an analysis is made of the results of the debate on an "appropriate" supply of international liquidity for the world. It is stressed that the present shortcomings involve not questions of global supplies, but distribution problems. Thirdly, the possibilities of improved control of international liquidity are discussed. Above all, light is thrown on the necessity and also the problems of control of the Euromarkets; the surveillance function of the IMF is underlined. Lastly, the liquidity problems of the gravely indebted developing countries and possible remedies are dealt with. The only sensible solution is considered to be keeping to the adopted course of adjustment and bridging, conditional liquidity assistance with the object of restoring the creditworthiness of such countries on the markets. To avoid renewed strains on liquidity, the investment and external financing of the developing countries must be geared more closely in future to the provision of long-term capital.
Kaufmann, Hugo M.
âThe Deutsche Mark between - The Dollar and the European Monetary Systemâ
Economic interdependence among Western countries has increased and so has the international transmission of economic disturbances. This in turn has promoted the search for alternative international economic structures that would give countries or a group of countries greater control over their destiny. One such attempt was the creation of the European Monetary System (EMS) which became operable in March 1979. The twin goals of the EMS were to return to the members of the European Economic Community greater economic policy independence from the United States and reduce the perceived disadvantages of the flexible exchange rate Arrangement, by creating a "zone of monetary stability". Neither goal was achieved. A European decoupling from United States monetary policy was not attainable by merely creating a currency bloc. The Deutschmark and Germany's economic performance are important links in the transmission process of the effects of United States monetary policy upon members of the European Economic Community. It is this link from the U. S. dollar to the EMS via the Deutschmark, which this article investigates. Since this link is stronger at times, weaker at other times, I attempted to answer the question of which conditions are propitious for some European decoupling, say, of interest rate movements from those in the United States, and for greater stability in the EMS.
âOn the Interrelationship Between Quantity an Price Changes - Observations on a Conspicuous Trade-off Relationshipâ
The article deals with the phenomenon of a negative correlation between output and price level growth established empirically on the basis of the example of the USA during the past fifteen years. The first section depicts the inflation-growth trade-off in the USA in that period. The second section presents various general explanations of contrariety of inflation and output growth dynamics. Explanations alleging direct causality (post-Keynesian approach, monetaristic neoclassical approaches) are found side by side with explanations which stress third factors (such as price shocks, distribution struggles, economic policy, anticipation patterns). The third section deals with fundamental problems of such general explanations, which lie on the one hand in the assumed but non-existent stability of reduced form representations and on the other in the superposition of short and long term effects. On the whole, the various theoretical explanation patterns of a negative correlation of output and price level growth must be described as still extremely hypothetical and vague. Only exact analysis of the institutional, politico-economic peculiarities of a country within the period under consideration is capable of providing any more concrete information at all. In the fifth section of the study, the structural conditions in the USA are accordingly elaborated in a little more detail. It proves that during the period under review there was a constantly prevailing stop-and-go policy pattern, which consisted in the early combatting of inflation on the one hand and of an increase in unemployment on the other. There is much to indicate that this economic policy reaction pattern was very soon anticipated by private economic entities, especially the entrepreneurs, in making their decisions, and this, together with the economic policy stop-and-go reactions resulted in the establishment of the statistically observed, clearly negative interrelationship between inflation and output growth in the USA.
âLong-term Stability and Growth in an IS/LM Model with Financing Function of the Investments and Balance-Sheet Restriction of Firmsâ
This model describes for a closed economy, excluding the public sector, the stock-flow dynamics resulting from investment financing via credit and the issue of shares. The development of the national product and yields on shares in successive periodic equilibria is examined. Christ's concept of long-term equilibrium as a stationary state with stock changes from zero is taken as a basis and its stability is analysed. The development of the system terminates in this stationary state where the stabilizing effect of capital stock growth due to investments overcompensates for the destabilizing effects of money supply growth likewise induced by investments. And nothing is changed even when additional disequilibria are permitted on the goods market. The stationary state, however, is associated with a positive national product only in consequence of the asset-forming effect in the consumption function. This appears to be problematical. Long-term equilibrium is therefore defined on the other hand as evolutionary. By the introduction of technical progress that increase the marginal productivity of capital and the accelerator, the original model is expanded to a growth model. The equilibrium condition of neoclassical growth theory (K = constant) implies that all flow and stock magnitudes grow at the constant rate of technical progress; the yields on shares and the financing costs do not change in the growth process. The "monetary side" of the economy does not play a role for the - demonstrated - stable growth equilibrium, in contrast to the determination of the period equilibrium.
Wall, Larry D.
âDeposit Insurance Reform: The Insuring Agencies Proposalsâ
Congress recognized that even though deposit insurance has provided some valuable benefits to the United States, the role of deposit insurance in a deregulated financial system should be reviewed. The Garn-St. Germain Act asked the FDIC, FHLBB, and the NCUA to review deposit insurance and report back with their recommendations. All three government deposit insurance agencies believe that deposit insurance still performs a valuable function, but each argues that some reforms in deposit insurance are desirable. The FDIC favors several different reforms. It supports variable rate deposit insurance provided by the government to introduce equity across banks to the deposit insurance premium schedule, but it does not expect its proposal to affect bank risk exposure significantly. The FDIC also favors a reduction in the de facto deposit insurance given large depositors to increased their incentives to monitor insured institutionsâ risks. The FDIC would like to disclose supervisory actions taken against individual banks. The FHLBB supports variable rate deposit insurance and the use of private insurance to encourage thrifts to reduce risk exposure. It also believes thrifts should have more capital and that their owners and directors should take a more active role in controlling their institutionâs risk exposure. The NCUA believes credit unionsâ risk could be reduced if those that attract large accounts (over $ 50,000) would pay more for their insurance and if the first share of every member were not insured. The NCUA would give federal credit unions the option of substituting private for public insurance. It favors a one time one percent assessment of credit union shares to increase capitalization of the NCUAâs fund