Monetary Policy in Italy from 1970 to 1978
ZinsÃ¤nderungsrisiken und die Strategie der durchschnittlichen SelbstliquidÃ¤tsperiode
Feder, Gershon and Just, Richard E.
Optimal International Borrowing, Capital Allocation and Credit-Worthiness Control
LiquiditÃ¤tsschaffung und -vermittlung an den EurowÃ¤hrungsmÃ¤rkten und die Struktur des internationalen Bankensystems
Bedingungen fÃ¼r die Schwankungen von Goldpreisen im Spiegel der Marktberichterstattung
GeschÃ¤ftspolitik der Sparkassen â Grundlagen und aktuelle Probleme
StabilitÃ¤tspolitik im fÃ¶rderalistischen System der Bundesrepublik Deutschland. Analyse und ReformvorschlÃ¤ge
Betriebliche Kapitalbeteiligungsmodelle. Verbreitung, EinfÃ¼hrungsmotive und Auswirkungen in der Bundesrepublik Deutschland und den Vereinigten Staaten von Amerika
MakroÃ¶konomische Konzeptionen im Meinungsstreit. Zur Auseinandersetzung zwischen Monetaristen und Fiskalisten
Steffan, Franz (Hrsg.)
Handbuch des Real- und Kommunalkredits
AuÃenwirtschaftslehre (Theorie und Politik)
âMonetary Policy in Italy from 1970 to 1978â
Some conclusions may now be drawn about the role of monetary policy in Italy. Throughout the whole period since the end of the Second World War, monetary policy has played a decisive role in the control of Italy's economic cycle and external accounts. The country's inflation and balance-of-payments crisis have been preceded - both during the 70's, which is the period considered here in greater detail, and earlier - by rises in the ratio of public and private sector financing to GDP. Monetary restriction has always been quite effective in controlling such crises. There has been clear evidence since 1973 of a mechanism whereby an increase in firms' liquidity leads to the exportation of foreign exchange, speculative stock-building, depreciation of the lira and inflation. The control of monetary policy on the level of prices passes through the external value of the currency. The possibility of manoeuvering credit Aggregates has been progressively reduced by the increase in the share of total credit absorbed by the public sector. Such a share was just below 30 % in the 50's, went down to less than 15 % in the period 1959-63, to rise again to 30 in the period 1964-69. In the 70's, up to 1976, the share of total credit going to the public sector rose on the average to 40 %; in 1977 and 1978 it was respectively around 60 and 65 %. (It is to be remarked however that a growing proportion of the financing to the public sector goes finally to cover financial needs of the private productive sector, and a growing proportion is transferred to agents with a high propensity to save.) The 1947 stabilization laid the foundation for rapid and long-lasting economic growth in Italy, while that of 1963 made possible a return to growth in output and investment with stable prices, though not in employment. Since 1969 monetary policy has continued to correct the country's external disequilibria but especially in connexion with the changed conditions of the labour market, the rate of inflation has remained high, and the recovery in production has been slow. In particular the oil crisis required recourse to monetary policy in order to curb domestic demand and check the imbalance in the external accounts. In view of the trend of costs and the increasing weight of the public sector deficit, the slowdown has mainly affected the level of investment, and only in part the rate of inflation. Thanks to its present strong external situation accounts, Italy finds itself at the end of 1978 in a position to return to a policy of markedly faster growth than in the last few years, with a surplus on the balance of payments which is enabling the burden of foreign debt accumulated since 1973 to be steadily reduced. Monetary policy and, in particular, the control of total financing of liquidity (especially that of firms), and of the structure of interest rates continue to be essential in order to keep overall demand within the limits of potential supply and maintain the improved balance-of-payments situation. lf the economy is to be able to achieve the growth rate which the availability of savings and labour would allow, it is nonetheless necessary that over the next few years a number of conditions - to a large extent outside the control of monetary policy - should be satisfied. These conditions can be summarized as: a) adequate growth in world demand; b) a reversal of the present tendency for the share of employee incomes to increase as a proportion of national income. This is necessary in order to keep exports sufficiently competitive and to make room for an increase in investment. To curb inflation, there will have to be a slowdown in the rate of increase of wage earnings in nominal as well as real terms; c) a reduction in the share of private savings used to cover the general government deficit on current account - again so as to provide greater scope for investment; d) a recovery in both public and private investment demand.
âThe Risks of lnterest-Rate Changes and the Strategy of the Self-Liquidation Periodâ
The article deals with a problem that is of significance especially for the orientation of the business policy of banks, that is, the question of how risks resulting from a change in the market interest rate can be ascertained, planned and controlled. Following an introductory section on the classification and importance of risks of- interest-rate changes, the second section defines the average self-liquidation period as the measure of the temporal focus of a series of inpayments and shows that the ultimate value of an investment is secured against interest-rate changes, lf the average self-liquidation period of investments coincides with the investor's planning horizon. A specimen calculation from the field of capital investment planning is used to illustrate the described strategy and an expansion of the basic model to portfolio dispositions. The third section discusses the approaches of Macaulay, Hicks and Samuelson to the problem of describing and planning risks resulting from interest-rate changes. The ventilation of the questions and premisses of these approaches simultaneously depicts some typical fields of application for the instrument of the average self-liquidation period for formulating and controlling the business policy of banks.
Feder, Gershon and Just, Richard E.
âOptimal International Borrowing, Capital Allocation and Credit-Worthiness Controlâ
The paper develops a two-sector model of a growing economy, incorporating the relation between debt servicing capacity and the terms of credit facing the country. These terms are affected by macro-economic variables such as the volume of imports and exports, the size of foreign exchange reserves and the magnitude of debt service payments due on outstanding debt. The fact that importers, exporters and producers may be too small to take account of the impact their actions have on the economy's terms of credit creates discrepancies between private and public optimal -solutions. The model suggests that optimal growth may require export promotion while simultaneously taxing both private borrowing of foreign funds and importation of capital goods.
âCreation and Supply of Liquidity on the Eurocurrency Markets and the Structure of the International Banking Systemâ
With the help of data published regularly by the Bank of England on the foreign currency transactions of the London banks, this study shows that the creation and supply of liquidity on the international financial market has increased substantially since the onset of the oil crisis in 1973. This process is interpreted as the outcome of the coincidence of fundamental changes on the investing side of the market in consequence of the oil price increase and of similar changes in the structure of the international financial system due to international co-operation among banks. The empirical analysis concentrates en the temporal development and the comparison of balance-sheet structures of various groups of London Eurobanks. The study reaches the conclusion that the relevant differences among the banking groups are attributable to their respective roles within the framework of the international, intermeshing banking systems. In this way, empirically supported arguments are developed, which make a close relationship between the structural changes in the international banking system and the growth of international liquidity creation and supply seem probable.
âConditions Governing Gold Price Fluctuations as reflected in Market Reportsâ
The expansion of gold trading facilities and the change in the monetary role of gold have simultaneously brought reporting on the international gold market more into the foreground of interest of investors, hoarders, speculators and processors. For preparing their market decisions, they expect reliable reports on conditions effecting the trend of the gold price, on supply and demand components, substitute markets and opinionforming events. Gold market reporters take these information needs into account by publishing reports on the market as a whole or on sub-markets, on balances of payments on gold account, on forms of trading and the current gold market situation. They use as basic information the results of gold movements accounts, that is, the trend of annual production, distribution and consumption of physical gold, explanatory models of functional interrelationships on the gold market and â especially for day-to-day reports â precisely the utilization of this information via opinion transfer mechanisms, possible forgetting processes or dissemination of tendentious news items is problematical. A further section of this article deals with methodological difficulties of gold market reporting. Its need for convincing formulations should not be satisfied by resorting to monocausal explanations or even unrealistic interlinking of trend assumptions or exaggerated extrapolations. On the contrary, it would enhance the information value of reports, if, for instance, conditions affecting gold pricing were weighted, substitution markets and time lags of supply and demand were included, and aggregates from statistical sources were analysed to suit the problem concerned. The author rounds off his statement with an explanation of gold threshold prices.