KREDIT und KAPITAL - Issue 2/1993


Contents


Articles

Rehm, Hannes
Perspektiven des Zahlungsverkehrs in der Europäischen Währungsunion

Neldner, Manfred
Der Einfluß des Nicht-Bankensektors auf das volkswirtschaftliche Geldangebot

Schweikert, Rainer
Implikationen alternativer geld- und wechselkurspolitischer Regeln im Transformationsprozeß

Gersbach, Hans
Inflation Rates and Money Growth During High-Inflations

Steindl, Frank G.
Making a Dishonest Government Credible: The Inflation Tax

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

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


Reports

Schmidt, Reinhard H.
Finance at the Frontier


Book Reviews

Carlberg, Michael
Monetary and Fiscal Dynamics (Franco Reither)

Loistl, Otto
Kapitalmarkttheorie (Jochen Wilhelm)


Summaries

Rehm, Hannes
"Perspectives of Payment Transactions in the European Monetary Union"

With the realization of the European Monetary Union conventionary foreign payments in this economic area will disappear. Payment transactions in the European Community will have to be organized as "domestic payment transactions" fast, safe and moderately priced. With the integration of card payment systems and the introduction of the eurocheque system in the private sector the banking industry made enormous progress concerning frontier-crossing mass payment transactions. Parallely to frontier-crossing large payments, the problems for frontier-crossing mass payment transactions are not really due to the transmission from one member state to another but concern the standard of payment transactions in the country of destination. It is therefore necessary to give a new structure to large payment systems. System risks, especially those concerning the electronic sector of payment transactions, have to be detected and limited. From the central banks point of view operational aspects have to be coordinated with those concerning monetary policy and banking supervision. For the sake of the consumer it has to be found the optimum combination from those solutions that were discussed considering the necessary coordination of the central banks and the management of payment transactions following the principles of free market economy.

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Neldner, Manfred
"The Portfolio-Behavior of the Non-Banking Public and the Total Money Supply"

lf reserve ratios are given, the value of the money multiplier critically depends on how the public wants to divide its money holdings between the various components of the total money supply. As the regression equations presented above indicate, these portfolio decisions mainly hinge on variables like relative prices, market interest rates, real wealth, and real income. The domestic money supply, therefore, not only varies in response to changes in the volume of base money or to a shift in the minimum reserve requirements set by the central bank, but it is also positively correlated with movements in real wealth and inversely correlated with movements in real income or in the level of market interest rates. Its reaction to changes in relative prices, however, cannot be predicted precisely, because in this case there are two effects pointing into opposite directions either of which may dominate.

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Schweikert, Rainer
"Implications of Alternative Monetary and Exchange Rate Policy Rules in the 'Transformation Process"

In view of the catastrophical experiences gained in developing countries and in light of various economic theories, it must be deemed surprising that fixed exchange rates have been proposed (and partly introduced) for stabilizing the economies also of the Eastern European reform states. This contribution shows that a stabilization programme based on fixed rates of exchange

- does not bind monetary policy in the short term and, respectively, is not consistent with overall economic restrictions,

- leaves a credibility gap compared with flexible exchange rates apart from a monetary union, which is likely to be out of reach for most countries in Eastern Europe,

- gives rise to the expectation of considerable growth losses with a resultant adjustment requirement.

For this reason, flexible exchange rates are recommendable for the reform states in Eastern Europe. Defining maximum acceptable rates of inflation or a fixed money supply rule would be eligible as a nominal monetary policy anchor. Institutionalizing an anti-inflationary policy with the help of an independent central bank and ensuring free competition ought to be a long-term objectives. However, as long as monetary policy is not truly independent from fiscal policy, expectations for both policy areas should be stabilized by a money supply rule consistent with the existing restrictions.

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Gersbach, Hans
"Inflation Rates and Money Growth During High-Inflations"

In this paper, the relatively low correlation between money growth and inflation rates during accelerating inflation is explained by a dynamic version of the standard monetary framework. Whereas steady state analysis exhibits a strong uniformity between inflation and money growth rate, a dynamic analysis shows a weaker relationship. This result rests on the fact that anticipated accelerating inflation is only sustainable if real balances decrease which, however, sets an upper bound for the growth rate of the nominal money supply.

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Steindl, Frank G.
"Making a Dishonest Government Credible: The Inflation Tax"

In a stationary economy a government maximizes revenue from the tax on real balances where the demand is unit elastic. In this paper, two propositions are established. First, it is shown that there is an incentive for government to gain additional revenue through surprise inflation by varying the rate around the traditional unit elastic revenue maximizing point. Second, it is demonstrated that this incentive is muted and, in some cases, entirely negated by the public's actions based on its expectations of such revenue enhancing activity.

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Bitz, Michael and Oehler, Andreas
The first part of this paper describes the theoretical and conceptual considerations of an in-depth study on private investor behavior.

Based on a broad literature survey the authors discuss the main determinants of private investor behavior stressing the links between influences from the "environment of the investor" (i. e. external information, social environment) and from "personal characteristics of the investor" (i. e. personal disposition, socio-demographic and socio-economic characteristics).

The first part of this article concentrates on the environment of private investors, the impact of external information and of social environment (e.g. the participation of household members in financial decisions).

This basic considerations are illustrated by some first empirical results from a large survey in 1992.

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Breuer, Ralf and Skaruppe, Martin
"Banks' Cost and Revenue Accounting as a Market Problem"

The first part throws some light on the theoretical foundations of the 'market interest method'. Compared with the attempts hitherto made at theoretically justifying decision-oriented cost and revenue accounting by banks, this contribution does not seek to evidence one or more bottlenecks, but choses the bank selling and the financial market theories as its approach. The credit institutions' customer business is part of the totality of the financial markets; characteristic of it are the divergent modes of access and distribution channels it entails.

The basic problem is to identify portfolios, comparable with customer business transactions, which are composed of money and capital market papers, In the technical literature, various "congruence criteria" have been developed for forming such portfolios. The comparable transactions made on the basis of such portfolios are examined by way of example as to whether and, if so, to what extent they are really appropriate, from the point of view of cash-basis accounting, for adequately reflecting the successes that result from transacting customer business.

It has turned out in particular that using a portfolio with a congruent capital structure does not of itself result in the successes obtained being adequately represented also in accounting. The compatibility of banks' cost and revenue accounting with financial or general accounting, which has been cited as an important argument in favour of this approach, can only be ensured under certain conditions.

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Reports

Schmidt, Reinhard H.
"Finance at the Frontier"

About ten years ago, J. D. von Pischke, a senior officer at the World Bank, had vigorously attacked the prevailing policies in the field of development finance. His recent book ,,Finance at the Frontier" is the first comprehensive attempt to rethink and reformulate the former critique, which had been based on purely neoclassical reasoning, and to derive constructive implications for a sound financial sector policy in developing countries from this critique. ,,The frontier" is the limit beyond which formal financial institutions are unable to provide services to the millions of poor people in the developing world. The book is about the nature of this frontier and ways to shift it outward.

Von Pischke's critique is a forceful as it has ever been. But its theoretical basis as well as its focus have changed. Misdirected regulation per se is no longer regarded as the fundamental reason why almost all development aid efforts in the field of finance have been unsuccessful in recent years. Instead, von Pischke now sees the main factor in the failure of development policy makers and administrators to understand the specific information and incentive problems which make any financial relationship precarious and which are particularly difficult to overcome in the environment of the informal economy of a developing country. This change in the conceptual basis of the critique provides the natural starting point for a very promising new approach to development finance policy.

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