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L’étude analyse les principaux déterminants du taux de change réel et modélise les effets de la politique de change du Cameroun sur ses équilibres externe et interne. Après une brève revue de la littérature sur les travaux sur les taux de change réel. Les techniques d’analyse de la cointégration ont permis d’identifier et d’estimer les variables fondamentales des taux de change effectifs réels. A long terme, les variables suivantes influencent le taux de change réel pondéré par les exportations : les termes de l’échange, les variables de contrôle des capitaux et des échanges, tandis que les termes de l’échange, les investissements et les dépenses du gouvernement ont un impact sur le taux de change pondéré par les importations. Les déterminants de long terme du taux de change réel pondéré par le commerce sont les termes de l’échange, l’investissement, les dépenses gouvernementales et le contrôle des capitaux. Les variables termes de l’échange, dette extérieure, masse monétaire et progrès technique influencent à long terme le taux de change réel interne. Ensuite l’étude estime des modèles à correction d’erreur afin d’identifier les déterminants de court terme du taux de change effectif réel. Les variables comme la croissance, le progrès technique, les avoirs extérieurs nets et l’aide au développement ont été introduites compte tenu de leur impact à court terme sur le taux de change réel. Les coefficients d’ajustement sont -0.20, -0.14, -0.19, -0.28 respectivement pour le taux de change effectif réel pondéré par les exportations, les importations, le commerce et le taux de change réel interne. L’élimination d’un choc qui survient sur l’économie camerounaise requiert respectivement 13 ans, 19 ans, 14 ans et 9 ans à partir du modèle estimé pour le taux de change réel pondéré respectivement par les exportations, les importations et le commerce et enfin pour le taux de change réel interne. Notre analyse révèle plusieurs périodes de sur-évaluation et de sous-évaluation du taux de change réel. L’évaluation de la transmission de la politique de change et de son impact sur l’équilibre externe et interne témoignent de la nécessité de mesures correctives d’ajustement du taux de change. En conséquence la stratégie d’un régime de change administré ne convient pas à l’économie camerounaise Cameroun pour poursuivre un double objectif externe et interne de compétitivité et de croissance économique avec un niveau d’inflation modéré.

This paper analyses the 1980s Latin American debt crisis in Argentina, Brazil and Mexico and, in particular, the influence of cumulative processes at work in its early and final stages. The paper is organised in three sections. The first examines the crisis features in the three countries, and maps the key macroeconomic and behavioural relationships at its onset and resolution. The second reviews the IMF-WB standard macroeconomic adjustment model as formalised by Khan, Monthiel and Haque (1986), arguing that it cannot usefully be applied to a situation combining balance of payments and public finance disequilibria as experienced in the debt crisis. Therefore, an original three gap model is introduced that moreover considers the impact of cumulative processes. The econometric analysis provided in the third section allows to unravel the conundrum of causes, effects and responses to the crisis in each of the three countries, and to successfully test the hypotheses underlying the proposed model.

This volume contains the proceedings of a round-table discussion on the consequences of EU enlargement on structural economic policies in East and West. The discussion was based on a report of the Working Group on Enlargement of the EU's Economic Policy Committee (EPC). In the light of the Lisbon agenda, the report asserts that in candidate countries (CCs) the progress in structural and institutional reforms has not been consistently strong across all countries and areas. In most CCs there is scope to further improve the functioning of product markets and to accelerate the transition to a knowledge-based economy. It is crucial to maintain the reform momentum, also in case of temporary lower growth performance, to avoid any risk of jeopardising the overall target of structural reform.

The paper provides an evaluation of the redistribution effects stemming from the changes to the personal income tax introduced in the last decade. The analysis confirms that between 1989 and 2001 the net average tax rate increased for all taxpayers and, above all, for one-earner couples. The reason is twofold: a) the progressivity of the tax makes larger the burden on these households of changes in income brackets and tax rates; b) the absence of dependent relatives does not allow the compensation of higher taxes with increased tax credits. However, these higher taxes are associated with a distribution of the tax burden that favours low income households with a high number of components, thanks to changes in tax credits. Concerning welfare effects, the results of the analysis are controversial. The net income distribution in 2001 dominates in Lorenz sense that of 1989 if the entire population is considered, if one-earner or two-earner households are separately taken into account, if the population is decomposed on the basis of the number of components in the family. The generalised Lorenz curves show that all one-earner and two-earner households in the lowest part of the income distribution have benefited from the changes in Irpef. The sequential stochastic dominance allows verifying that social welfare has increased for all one-earner households but the singles and has diminished for two-earner households.

This paper challenges the view that external shocks caused Euroland's 2001 slowdown and subsequent stagnation. Instead, the design of Euroland's macro policymaking arrangements is found lacking in looking after sufficient domestic demand growth. In the event the ECB has failed on its stabilization role--a rather vital role given that fiscal policy is severely constrained by the Stability and Growth Pact. As a result, Europe is in a precarious situation of stagnation today, and under the current regime there is even a risk of self-reinforcing destabilization. Hence, reforming the regime is urgent. A nominal GDP target to be pursued by fiscal and monetary policies in cooperation would provide Europe with the growth anchor that is currently missing.

This regional input analyses recent developments and future prospects of fiscal policy (part I) and monetary policy (part II) of Benelux, France and Germany (EMU-5) covering the period of 1997-2004. The fiscal policy part concentrates on budgetary effects of the eastward enlargement. Besides, socio-economic developments are considered, as well. In context of monetary policy affairs, the heterogeneity of EMU-5 members is surveyed. The brief analysis of two main aspects of the monetary union – the GDP growth rates and the inflation rates – indicates that diversity among the surveyed countries still prevails.

Why are efficiency-enhancing reforms often frail and subject to being undermined over time? Two theories are examined: public-choice theory, which explains this as the possible result of a need, from time to time, to wipe the slate clean in order to retain productivity in the distribution of favors to interest groups, and a theory which acknowledges that politicians may implement reforms for ideological reasons but still, as time passes, be influenced by the logic of the political and media systems to abandon their initial aspirations. In any case, the demise of reforms is partly a function of the constitutional setting: rules which encourage shortsightedness and easy satisfaction of interest-group agendas make it difficult for decision-makers to withstand pressure for legislative change. Avenues to mitigate these problems through constitutional reforms are explored.

Switzerland is one of the few countries with a relatively mature funded pension scheme. This paper offers a short description of the Swiss system, highlighting two specific areas for which previous experience is particularly valuable. Taking the Swiss example, firstly, it illustrates the importance of prudential regulation and adequate transparency standards. Secondly, the paper explores the impact of different pay-out options in a mandatory second pillar.

Using daily data on intervention activities by the Central Bank of Chile between 1998 and 2003, this paper studies the impact of these actions on the peso/dollar exchange rate. Time series estimates using OLS (after testing for weak exogeneity) and two-stage least squares estimates are used. Our findings suggest that the effect of daily interventions is not statistically different from zero. However, the public announcements at the beginning of both post floating intervention periods did have an effect in the level and trend of the exchange rate. This suggests that the market adjusted in response to the release of information., Este artículo estudia el efecto de las intervenciones cambiarias realizadas por el Banco Central de Chile sobre la paridad peso/dólar, utilizando datos diarios de intervenciones entre 1998 y 2003. Estimaciones de series de tiempo con MCO (tras testear la existencia de exogeneidad débil) y con MC2E son utilizadas. Los resultados muestran que el efecto de intervenciones individuales no es significativamente distinto de cero. Sin embargo, los anuncios al principio de ambos períodos de intervención postflotación tuvieron un efecto significativo sobre el nivel y la tendencia del tipo de cambio. Esto sugiere que el mercado se ajustó a la información revelada por tales anuncios.

On 15 and 16 January 2003, an intensive speculative attack was launched against the exchange rate band of the forint. This study analyses the monetary policy decisions with regard to the antecedents of the speculation, the events of the speculative episode and the subsequent period of consolidation. The study finds that the speculative attack was irrational and unjustified in view of several considerations. Through adjustments in the policy rate and the modification of monetary instruments, the MNB was able to defend the exchange rate band of the forint. The MNB successfully localized the effects of the speculative attack on the interbank market. The MNB’s presence on the foreign exchange market facilitated the rapid and controlled withdrawal of the speculative capital, without threatening the disinflation process and the stability of the financial system. The investors taking part in the speculation incurred substantial losses, while the market developments after the speculative episode increased the banking system’s profit.

Under high inflation, money experiences a process of institutional fragmentation: the unit of account and the unit of payment are split and transferred on alternate supports, either a foreign currency as for instance in Argentina, or domestic indices as in Brazil. Since the early 1970s’, this alternate options have had far-ranging consequences on stabilisation strategies, on how monetary functions have then been re-integrated as on the overall quality of monetary regulation, i.a. for macroeconomic management. This paper compares the 1994 Brazilian Real Plan, which rebuilt a working, national monetary order, and the bimonetary Argentine Currency Board regime. After the 1999 devaluation in Brazil had demonstrated the resilience of the new money, un-pegging the Argentine peso caused a major dislocation in 2002. Pesification’ is then analysed as an improvised attempt at rebuilding a single, national money. Surprising positive results were observed as regard the price mechanism for labour and goods. Conversely, ‘pesification’ of financial contracts (deposits, credits, bonds, etc.) proved a disaster : State intervention into private contracts, which was justified by the presence of a valuable public good – money –, opened the way for a large-scale, opaque redistribution of private wealth. This in turn raises the risks of a dangerous weakening of the interaction rules between private and public spheres.

I construct a model of a dynamic economy in which the government collects taxes and injects them into banks f capitals for stabilization of financial system. In theoretical part, I derive loan demand and supply functions from dynamic optimizing problems of households and banks. Carrying out a simulation, I show that the injection improves welfare in some first periods, although it rather aggravates in the long term. I also show that the injection induces efficient investments in some first periods, while, it induces inefficient investments in the long term.

Under high inflation, money experiences a process of institutional fragmentation: the unit of account and the unit of payment are split and transferred on alternate supports, either a foreign currency as for instance in Argentina, or domestic indices as in Brazil. Since the early 1970s', this alternate options have had far-ranging consequences on stabilisation strategies, on how monetary functions have then been re-integrated as on the overall quality of monetary regulation, i.a. for macroeconomic management. This paper compares the 1994 Brazilian Real Plan, which rebuilt a working, national monetary order, and the bimonetary Argentine Currency Board regime. After the 1999 devaluation in Brazil had demonstrated the resilience of the new money, un-pegging the Argentine peso caused a major dislocation in 2002. 'Pesification' is then analysed as an improvised attempt at rebuilding a single, national money. Surprising positive results were observed as regard the price mechanism for labour and goods. Conversely, 'pesification' of financial contracts (deposits, credits, bonds, etc.) proved a disaster : State intervention into private contracts, which was justified by the presence of a valuable public good - money -, opened the way for a large-scale, opaque redistribution of private wealth. This in turn raises the risks of a dangerous weakening of the interaction rules between private and public spheres.

I investigate the effects of the Tax Reform Act of 1986 on the U.S. wealth distribution in a model in which heterogeneous agents face idiosyncratic labor income risk and hold only one asset. The model's stochastic process for earnings is consistent with estimates from panel data. I calibrate the model to match the U.S. wealth distribution and the progressive U.S. income tax structure in 1984. Then, using the same earnings process, I compute the equilibrium with the post-reform income tax structure of 1989. The reform increases the after-tax return to savings more for wealthy households than for wealth-poor households. As a result, I find that the tax reform can account for all of the increase in wealth inequality observed in the data.

Quarterly national accounts data are amongst the most important and eagerly awaited economic information available, with estimates of recent growth regarded as a key summary indicator of the current health of the Australian economy. Official estimates of quarterly output are, however, subject to uncertainty and subsequent revision. Hence, the official estimates of quarterly national accounts aggregates, with which policy-makers must work, may in practice be an inaccurate guide to their ‘true’ values, not just initially but even for some time after the event. In this paper we examine over 120 vintages of Australian GDP data to provide an historical assessment of the scale and persistence of real-time errors in the measurement of actual output. The issue of whether it is possible to obtain reliable real-time estimates of the output gap is addressed in detail in a companion paper (Gruen, Robinson and Stone 2002).

In this paper we assess whether monetary variables, which are observed with little delay, conveyed marginal information on the state of the Italian economy in the 1990s, taking as a benchmark the forecasting errors generated by the quarterly model used by the Bank of Italy. We follow two approaches. First we map monetary surprises into estimates of the structural disturbances using a Kalman filter approach, in order to improve the forecasts. Then we look at the sample correlations among forecasting errors in monetary and real variables, thereby taking into account links that may not be accounted for by the model�s structure. We find that bank interest rates have a strong information content. Monetary aggregates play no role according to the first approach; according to the second approach they do, but the economic interpretation of this finding is not straightforward. All in all, the results highlight the role of financial prices and quantities as indicators of the state of the economy. However, they do not imply a mechanical policy reaction to this information, as both the strength and the sign of the relationship between the surprises in monetary and real variables depend on the source of the shocks.

From 1995 to 2001 Russia witnessed an asset market boom, a deep financial crisis, and a surprisingly forceful recovery. This paper analyzes economic policy and data of the time to explain why fluctuations were so violent and to draw lessons for Emerging Markets investors as well as for policymakers. The evidence suggests that the boom in Russian asset prices in 1995-1997 resulted from a highly ambitious monetary stabilization program amidst favourable global conditions. Inflation was compressed faster than in advanced transition economies, at the expense of rapid real appreciation and a persistent need for capital inflows. Weak economic structures and the lack of broad political support hampered fiscal consolidation and structural reforms, however. This made the monetary stabilization program vulnerable. Moreover, the program did not provide a politically viable exit option. Therefore, after external shocks had eroded the sustainability of the exchange rate target in 1998, the authorities felt compelled to defend it as long as possible. The ultimate crisis escalation resulted in a partial government default and steep devaluation. However, the economy responded with relief to the crisis-related easing of monetary conditions. The latter outweighed the drag from a collapse in capital imports. Also, the crisis escalation united the political spectrum around a new fundamental consensus on economic policy. Post- crisis governments prioritized fiscal consolidation over disinflation. This reduced dependence on foreign capital and made overall stabilization robust to external shocks. The more stable political and economic environment spurred economic reform in 2000-2001, particularly in the areas of public finances and investment conditions. Together with persistent commitment towards international integration this heralds a convergence of Russia’s economic structures with those in Central and Western Europe.

This report presents the results of a number of simulations with the Social Policy Simulation Database and Model (SPSD/M) of National Child Benefit (NCB) rules, isolating the impact of these rules on low-income or poverty rates and gaps in Canada. According to the after-tax LICO, now the most widely reported measure of low income or poverty, the national poverty rate for economic families with children ?after the provincial clawback of the NCB supplement (NCBS) from social assistance recipients and the provincial re-investment in cash or income-support programs (excluding in-kind programs) are factored in ?fell 4.6 per cent between 1996 and 1999 because of the introduction of the NCBS. The drop in the poverty gap was even greater: 8.7 per cent. Under the rules set to be in place by 2004, the decline in the after-tax LICO poverty rate is projected to be 11.8 per cent and that in the poverty gap 18.0 per cent relative to the rate and gap that would have prevailed in the pre-NCBS world. The improvement in the economic well-being of low-income families with children would be even larger if the impact of provincial in-kind programs financed by the NCBS through the social assistance clawback were included.

This paper seeks to understand the behavior of Greenspan's Federal Reserve in the late 1990s. Some authors suggest that the Fed followed a simple 'Taylor rule,' while others argue that it deviated from such a rule because it recognized that the 'New Economy' permitted an easing of policy. We find that a Taylor rule based on inflation and unemployment does break down in the late 1990s. However, the Fed's behavior appears stable once one accounts for the falling NAIRU of the period. A rule based on inflation and the deviation of unemployment from the NAIRU captures the Fed's behavior through the entire period from 1987 to 2000.

We use the ten years of experience in inflation-targeting in New Zealand since 1989 to test whether monetary policy appears to conform to the simple rules that have been recommended for it in the literature. Of the inflation targeting central banks, the Reserve Bank of New Zealand has both the longest experience and probably the most clearly defined target and policy framework for achieving it. We show that while a Taylor rule with the standard parameters used in the US does indeed describe New Zealand monetary policy quite well, the Reserve Bank has focused rather more strongly on price stability, as required by its Policy Target Agreements. However, while the conduct of New Zealand monetary policy as set out in the Monetary Policy Statements is firmly based on targeting the inflation rate in the future we find, using the Bank’s own forecasts, that nevertheless targeting inflation close to the present appears to be a better description of policy. Furthermore, restricting the policy choice to the information available to the Reserve Bank at the actual time of policy settings and ignoring subsequent revisions to published statistics does not result in a much improved explanation of its actions. We find a clear ‘smoothing’ element to the Bank’s policy rather than immediate response to every small fluctuation. We show further that some of the variables that enter the policy rule have slightly asymmetric cycles. From symmetric and asymmetric cointegration tests on the long-run relationship between interest rates, the output gap, and inflation we show that there is insufficient evidence to suggest that monetary policy has been asymmetric in treating upside inflationary pressures differently from those towards deflation.

EU Member countries have shown different degrees of ambition to reach a budget position of “close to balance or in surplus”. Differences in ambition can only partly be explained by the relative size of cyclical safety mar­gins or differences in the number of votes in the ECOFIN Council. It is also shown that in the medium run there is no evidence for a trade-off between budget consolidation and growth. Of the eight countries with the strongest reduction of structural budget deficits in the period 1992-2001, only one showed growth rates below the EU average. The other seven countries even managed to achieve higher growth rates than in the period 1974-91 during which structural deficits had increased.

Many households received income tax rebates in 2001 of $300 or $600. These rebates represented advance payments of the tax cut from the new 10 percent tax bracket. Based on a survey of a representative sample of households, this paper finds that only 22 percent of households receiving the rebate would spent it. Instead, they would either save it or use it to pay off debt. This very low rate of spending represents a striking break with past behavior, which would have suggested a much higher rate of spending. The low spending rate implies that the tax rebate provided a very limited stimulus to aggregate demand.

The traditional avoidance literature undeservedly neglects tax base distribution as a factor affecting the avoidance price, and generally assumed to be equal to the avoidance cost. In reality, avoidance providers are usually either high-skilled specialists or insiders. The strong collusion thus, naturally seems to be an assumption of the behavior of avoidance providers. Within such a framework, income distribution, which forms an avoidance demand together with tax codes, plays a very essential roll for the outcome of both avoidance price and quantity. My article models an economy with a monopolistic avoidance provider and imperfect information, and illustrates possible consequences of tax base changes. The paper examines the relationship between inequality and a government's ability to collect tax revenue, and also considers the possible outcome of a tax base broadening. Furthermore, it provides an additional explanation for the secession decision.

BoliviaÂ’s macroeconomic performance in the period 1994 to 1998 is analyzed and compared with the performance in former periods and the performance of other developing countries (grouped according to income, region, and debt status). This allows to assess what has been achieved in Bolivia since the deep crisis of the early 1980s. A special focus is whether the constraints to investment, economic development, and redistribution, i.e. on domestic savings, export performance, and fiscal revenues have been relaxed. Findings suggest an overperformance with respect to stabilization and an underperformance with respect to the growth constraints.

As mainland China's inflationary spiral accelerated in 1947-1949 there was a massive outflow of funds to the island of Taiwan. The exporting of China's hyperinflation was facilitated by the fixed, overvalued, exchange rate between the mainland Chinese currency and the Taiwanese currency that was adopted in August 1948. Empirical tests offer support for the importance of the 1948 monetary policy reform and suggest a substantial impact of capital inflows and excess money growth in mainland China on inflationary pressures in Taiwan. We find no independent role for Taiwanese money growth in the inflation process.

There has been a large decline in the volatility of Australian output over the past 40 years. This paper looks at the causes of this decline. Accounting for part of the change have been substantial changes in the inventories cycle. Abstracting from changes in the inventories cycle there have also been significant declines in underlying output volatility. This paper focuses on the underlying structural factors for the reduction in volatility. It finds that the principal cause of the decline has been a decline in the shocks hitting the economy rather than an increase in structural stability. Furthermore, the primary explanation seems to lie in a reduction in the volatility of supply or ‘productivity’ shocks. The ultimate source of these productivity shocks is left as an open question.

This paper discusses alternative adjustment patterns in Bolivia over the last three decades using a SAM-based model that explicitly separates formal from informal activities, includes separate accumulation balance adjustments for different economic agents, differentiates closures by periods of time, and incorporates balances for all sectors of the economy. It is argued that both, fluctuating capital inflows and terms of trade as well as the stabilization policies and the structural reforms, affected different groups differently. Moreover, the various adjustment patterns followed by the groups have determined the direction of adjustment at the macroeconomic level. Thus, macroeconomic adjustment in Bolivia has been the outcome of sectoral adjustments and of the interactions among different agents through the diverse markets they operate in.

This paper analyzes disparities among nominal and real exchange rate movements across the Central and Eastern European (CEE) countries from 1991 to 1996. The method of analyzing such processes is to examine whether the differentials of exchange rate changes converge or diverge over time. Currently nine countries in Central and Eastern Europe have formally applied for full membership in the European Union. The results support convergence in general, but indicate a wide disparity in the degree of convergence. From the real exchange rate standpoint the paper identifies the best candidates to join the European Union in the first round of accession.

Since almost two decades back a large number of LDCs have embarked on World Bank supported structural adjustment programs with the objective to promote econ-omic growth and private investment. I consider how the design of reform programs can increase reform credibility and thus reduce uncertainty in the economy. Using new data on adjustment lending, I test the effects of reform on private investment behavior. I find that while most political factors seem to have no effect on private investment response in reforming countries, magnitude as well as scope of reforms are important explanatory variables.

US fiscal policy under Clinton administration Helene Baudchon, Jerome Creel, Vincent Touze et Bruno Ventelou This paper investigates the last ten years of US fiscal policy with three levels of reading. At the macroeconomic level, the current federal budget surplus has resulted from the US economie growth, from a good policy mix, and from a commitment to a balanced structural budget which emerged at the beginning of the nineties. At the institutional level, several Acts introduced caps on discretionary spending and increasing taxes. We show that the reduction in defense spending has explained 80% of the outlays slowdown and that economic growth has had non-linear effects on tax revenues. Last, using a political-economists' view, we develop some alternatives on « what to do with the surplus ». Indeed, many constraints, be they social or political-economic, intervene in the choice between reducing taxes, reducing the public debt, or increasing federal spending. JEL codes : E 62, E 65, H 61, Au cours de la décennie qui vient de s'écouler, le paysage budgétaire américain a radicalement changé. Le solde public fédéral est ainsi passé d'un déficit historique de 290 milliards de dollars en 1992 à un excédent de 124 milliards en 1999 (soit 1,4 % du PIB). De tels chiffres, inhabituels pour les États-Unis, s'appuient sur la combinaison d'une croissance très rapide des recettes fiscales et d'un infléchissement dans l'évolution des dépenses. D'une part, une conjoncture particulièrement dynamique s'est trouvée associée à une politique monétaire plutôt accommodante. D'autre part, structurellement, un ajustement vers un solde équilibré a été engagé dès le début des années 1990. En comparaison avec les efforts d'assainissement un peu plus tardifs des pays européens, l'ajustement américain apparaît plus progressif, quoique d'un niveau extrêmement important : entre 1992 et 1999, un peu plus de la moitié de l'amélioration du solde effectif est due à l'effort structurel. C'est en réaction aux déficits des années 1980 et du début des années 1990 que la discipline budgétaire a été renforcée. Les lois budgétaires se sont succédées, introduisant des plafonds sur les dépenses et augmentant la pression fiscale. C'est cependant au plan institutionnel que les mutations ont été les plus importantes : les États-Unis sont passés à la « programmation pluriannuelle » des finances publiques, et ont substitué, à l'objectif de budget unifié équilibré, un objectif de solde « on-budget » équilibré, i.e. hors excédents de la « Social Security ». Ainsi, ces derniers ne peuvent-ils plus être utilisés pour renflouer le solde total, et ceci afin d'assurer la sauvegarde du système de retraite. Les deux candidats aux élections présidentielles de novembre 2000 ne remettent pas en cause ces évolutions, mais — malgré les effets d'annonce de remboursement de la dette — les propositions d'augmentation des dépenses sociales d'Al Gore et de réductions d'impôts massives de George W. Bush laissent augurer un relâchement de la discipline. Cette dernière pourrait cependant être maintenue si le Congrès et l'administration restent de bords opposés. L'amélioration du solde public, entre 1992 et 1999, s'appuie à hauteur de 60% sur la vigueur des recettes fiscales et à hauteur de 40% sur l'infléchissement des dépenses. La forte contribution des recettes apparaît néanmoins de nature très conjoncturelle. En effet, le dynamisme de l'activité et la forte valorisation boursière, en augmentant le taux d'imposition apparent, ont dopé la croissance des recettes. La modération des dépenses ressort plus structurelle, même si elle s'appuie à hauteur de 80% sur la seule baisse des dépenses militaires. La fin de la guerre froide a largement justifié cette dernière évolution, mais la contrainte du plafonnement imposé aux dépenses discrétionnaires a également joué. La baisse des charges nettes d'intérêt a résulté de la baisse des taux d'intérêt et de la diminution de la dette publique consécutive à l'assainissement primaire. La faible progression des dépenses obligatoires s'explique en partie par le dynamisme de l'activité qui a limité le nombre des bénéficiaires des programmes sociaux, mais également par un ensemble de réformes structurelles. Parmi celles-ci, on peut noter la réforme du Welfare de 1996, qui prévoit des incitations plus fortes au retour au travail; le développement des organismes de soins intégrés qui contribue au ralentissement des affiliations à Medicare; et la diminution du taux de remboursement des actes décidée en 1997. De nombreuses contraintes politico-économiques pèsent aujourd'hui sur les choix d'affectation des excédents budgétaires cumulés anticipés. Les réductions d'impôts, les augmentations de dépenses, le remboursement de la dette et/ou le provisionnement des dépenses futures n'ont pas le même impact politique. Il faut, par ailleurs, tenir compte de la déformation active du budget en faveur des dépenses sociales du fait de l'arrivée à la retraite d'une classe d'âge nombreuse (choc du baby-boom), de l'allongement de la durée de vie des retraités, de l'intensification de la consommation de soins médicaux. Une solution généralement avancée aux Etats-Unis, pour lisser la hausse de la pression fiscale, ou de l'endettement, liée au choc du baby boom, est de s'engager dans une stratégie de provisionnement, ou au minimum de préservation des marges de manoeuvre en réduisant la dette nette. La stratégie de création d'un fonds de réserve peut être mieux comprise par l'électorat que la stratégie de remboursement de la dette, parce qu'il perçoit mieux le pro fit direct qu il peut en tirer (de meilleures retraites). Trois simulations d'évolution des finances publiques américaines montrent néanmoins que la stratégie de provisionnement n'est pas indispensable : même dans le cas assez improbable d'une chute brutale et permanente de l'activité aux Etats-Unis, une augmentation d'un point et demi du taux de pression fiscale suffirait pour restaurer l'équilibre budgétaire. Si le provisionnement peut s'avérer utile, c'est sans doute plus en raison du bas niveau inquiétant du taux d'épargne privé., Baudchon Hélène, Creel Jérôme, Touzé Vincent, Ventelou Bruno. La politique budgétaire américaine sous la présidence Clinton : un rêve de cigale. In: Revue de l'OFCE, n°75, 2000. pp. 243-290.

The adoption of inflation targeting as a monetary policy strategy in Brazil was a convenient way to replace exchange rate rule by targeted inflation in an effort to anchor inflation expectations. This paper briefly evaluates the inflation target experience from three viewpoints: reasons behind the success, difficulties regarding forecasting and the risks ahead. It analyses the factors behind the success as well as the way initial doubts and a second round of mistrust were successfully dealt with. It looks at the empirical difficulties to estimate a reliable Demand Function and examines evidence on the persistence of high interest rates as captured by a Taylor rule. It points out to possible signaling problems in the transmission mechanism that might lead to a weakening of the confidence in the strategy in the future. Section 3 draws conclusions on risks that emerged together with favorable outcomes of the first year. There has been a substantial progress in the overall confidence in monetary policy's management. Inflation targeting has certainly played a relevant role in this gain. However, it looks like we have not got rid of the "thin ice economy" riding in the post-Real era, since dependence of inflation on foreign exchange availability is still high. Thus the Brazilian economy is still excessively dependent on international liquidity fluctuations. As it happened in the past six years, because of the combination of the size of interest rate movements with the persistence of effects, a double barrel destructive effect on investment and banking, good scenarios tend to be too good, and bad scenarios are seen as terrible for assets markets. An appendix note was written by Thomas Wu on the problem of finding a measurement of the output gap for the Brazilian economy.

JM Keynes was more important to Australia than Australia was to him. Yet the connections are many and varied, and worthy of some attention. As has been said, ‘a survey of the rise and fall of Keynesian economics in Australia’ is ‘an important story which still has to be written’; but it ‘is the subject for at least three years arduous research’ (Groenewegen 1983). This paper is less ambitious. An exercise in economic, personal and political history and in the history of economic thought, it briefly outlines: 1. Keynes’s dealings with the Australian Prime Minister, William Morris Hughes, over the reparations demands against Germany after World War I; 2. some incidental economic issues; 3. Keynes’s opinions and influence on the handling of the Depression in Australia; 4. the early impact of Keynesian economics in Australia; and 5. Australia’s approach to the creation of the International Monetary Fund and World Bank, of which Keynes was co-founder.

We believe that India has a chance for a tremendous breakthrough in economic development during the current decade. India’s political system is more than ever in consensus about the basic direction of reforms. The current government enjoys a strong electoral mandate. A decade of opening of the economy has produced new dynamism, most dramatically in the Information Technology sector, but in others as well. The world is waking up to India’s crucial role as the largest democracy and as a dynamic economy, if still a low-income one on average. The new technologies (especially information technology and biotechnology) give new opportunities for economic and social development. We suggest that India should set major national goals of development. These goals will help to galvanize domestic public opinion in support of the objectives of development, provide a gauge against which to judge the progress of policies, and help the world community to appreciate the efforts underway, and support them through increased flows of foreign investment. To make the first decade of the 21st Century a true Decade of Development will require a broad-based program of economic and social actions. We highlight ten crucial initiatives in this regard.

Argentina’s money and banking system was hit hard by the Great Depression. The banking sector was awash with bad assets that built up in the 1920s. Gold convertibility was suspended in December 1929, even before the crisis seriously damaged the core economies. Commonly, these events are seen as being driven by external real shocks associated with the World Depression, espite the puzzle of the timing. We argue for an alternative, or complementary, explanation of the crisis that focuses on the inside-outside money relationship in a system of fractional-reserve banking and gold-standard rules. This internal explanation for the crisis involves no timing puzzle. The tension between internal and external convertibility can be felt when banks fall into bad times, and an internal drain can feed an external drain. Such was the case after financial fragility appeared in the 191427 suspension. Resumption in 1928 was probably unsustainable due to the problems of the financial system, and a dynamic model illustrates the point well. The resolution of the crisis required lender-of-last-resort actions by the state, discharged at first by the state bank issuing rediscounts to private banks. When the state bank became insolvent, the currency board started bailing out the system using high-powered money. Thus came about the demise of the currency board and the creation of a central bank in 1935, an institution that had no pretense of a nominal-anchor commitment device and no ceiling on lender-of-last-resort actionsinnovations with painful long-run consequences for inflation performance and financial- sector health. As one of its first substantive actions, the central bank engineered a bailout of the banking system at a massive social cost. The parallels with recent developing-country crises are remarkable, and the implications for the institutional design of monetary and banking systems are considered.

This paper develops a nonlinear vector autoregression of inflation and money growth subject to changes in regime. The regimes are fully characterized by the mean and variance of inflation and are conjectured to be the result of alternative government policies. Agents are unable to observe directly whether government actions are indeed consistent with the inflation rate targeted as part of a stabilization program. However, as part of their money demand decision, agents construct probability inferences regarding the regime. Government announcements are assumed to provide agents with additional, possibly truthful information regarding the regime.

This paper analyzes performance of the transition economies in the Central and Eastern European (CEE) countries in terms of their convergence in selected macroeconomic fundamentals. The analysis uses monthly data on industrial output, money aggregate (M1), consumer prices and producer prices from 1991 to 1998. The analysis is carried out within distinctive groups of countries based on different trade and geographical arrangements, and uses a panel unit-root test as an econometric tool. In general, we conclude that the transition CEE countries were not successful in achieving a certain degree of natural economic integration among them so far. Certain levels of convergence occurred only for a limited number of countries at the advanced stage of transition process.

We build a dynamic, general equilibrium model of a small, open, semi-industrialized country with overlapping wage contracts, wage indexation, and indexation lags. We calibrate and simulate the model in order to assess the role of wage contracts in explaining the features of recent real-world stabilization programs. We show that a policy package with a significant reduction of public sector deficits can reproduce qualitatively most of the observed comovements among macroeconomic aggregates. However, the responses of the model's endogenous variables to the implementation of the stabilization program are not as pronounced as in the data. Nous élaborons un modèle dynamique d'une petite économie ouverte et semi-industrialisée. Dans cette économie, il y a des contrats de salaire imbriqués qui peuvent être indexés au niveau des prix, et où l'indexation peut être sujette à des retards. Nous étalonnons et simulons le modèle afin d'expliquer les caractéristiques principales de certains programmes de stabilisation récents. Nous montrons qu'un programme avec des réductions substantielles des dépenses publiques engendre des comouvements qui sont qualitativement compatibles avec les données. Par contre, la taille des réponses des agrégats au programme de stabilisation est généralement inférieure à ce qu'on observe dans les données.

We develop an alternative test of the `German view' - that a reduction in government consumption may lead to an immediate private consumption boom - derived from an open-economy permanent income model. In our empirical study we find, in accordance with the `German view', that an anticipated permanent reduction of government consumption is associated with a strong short-run (and permanent) increase in private consumption. However, the Danish experience following the fiscal contraction in 1982 suggest that this was not a dominant factor behind the private consumption boom. Our evidence shows instead that other factors increasing permanent income, including a substantial terms-of-trade improvement, were much more important.

The question we seek to address is: what effect has economic turbulence since 1985 had on three of the institutional foundations of post-war Japanese industrial success? First, we examine the Japanese 'main bank' system whereby a 'main' bank is involved in a special type of long-term relationship with the non-financial firms that it lends to. Second, we look at the close inter-corporate relationships between main manufacturing firms and their suppliers. And third, we consider the nature of Japanese industrial policy and the interventionist role of the Ministry of International Trade and Industry (MITI) and the relatively weak role of Japanese competition policy under the authority of the Japan Fair Trade Commission (JFTC). In each case we present evidence which suggests that these institutional foundations of the post- war Japanese economy have been fundamentally weakened over the period we look at.

The financial turmoil that hit Russia in August 1998 was extremely confusing to many foreign observers working in Russia. It was astonishing to see a country that seemed on its way to prosperity suddenly experiencing an economic meltdown. As part of my work, I was often asked to provide explanations and guidance regarding the situation in Russia. The casual explanations were gradually transformed into a methodical presentation, which eventually became this article. Combining information and opinions from various sources, I have tried to compose a comprehensive presentation of the economic events that have taken place in Russia during the second half of 1998. It is my hope that this presentation will help other people to gain better understanding of the situation in Russia.

The main characteristic of the implementation of the European Monetary Union (EMU) is the transition from various national currencies to the Euro, the common European currency. A final fixing of the individual bilateral exchange rates of all European countries involved in the Monetary Union accompanies this step. Regarding the microeconomic effects, a positive impact on trade is expected by the reduction of transaction and foreign currency management costs as well as by the elimination of the exchange rate uncertainty. Formerly, the latter influenced foreign trade.1 At the same time, however, the autonomy of national economic policy is restricted by the loss of former national monetary policy instruments, which will now operate European-wide with the start of EMU. In addition to a unique interest rate policy inside EMU, there will be no longer an – even limited - flexibility of the nominal exchange rates. According to the theory of Optimal Currency Areas (OCA)2, in a flexible or at least not irrevocably fixed exchange rate system3 these are two potential instruments carrying some of the burden of macroeconomic adjustment. EMU supporters and sceptics give these aspects different values: while supporters hope to obtain growth and employment impulses through more monetary stability, sceptics are anxious, since in their opinion, the economic convergence4 of the European states is yet not optimal and, additionally, alternative instruments do not yet function efficiently.

The structural effects of the Danish tax reform of 1993 are evaluated using DREAM, a dynamic CGE model of the Danish economy featuring overlapping generations of agents who have perfect foresight. The tax reform implied a reduction in the tax burden and the progressivity of the labor income taxation, an introduction of "green" taxes as revenue raising instrument and a restructuring of the capital income taxation. We find that the overall macroeconomic effects of the total reform are limited, but that the accumulation of wealth in the private sector is stimulated, which generates a long run increase in aggregate consumption. Analyzing the three parts of the reform separately reveals that the small net effect of the reform is due to counteracting forces of each of the parts. The reform is a strict Pareto improvement - given the initial calibration of the model - in the sense that all generations are better off after the reform.

Japanese Foreign Direct Investment in Peru was substantial in his beginnings, in the 60s and 70s, and has been decreasing unable to achieve sustainable levels as Japanese investment in Asia. Using the development concepts of “flying geese-pattern” model, and explaining the singular business conglomerates system, Keiretsu, and the global commercialization companies, Sogo-Shosha, the author analyzes Japanese investment in Peru.

Cet article porte sur les causes plus ou moins lointaines de la crise thaïlandaise, son développement à court terme, en 1997-1998, et les réponses successives apportées par les autorités. Une première partie analyse les déséquilibres apparus dans la croissance, depuis le début des années 1990. Si les performances de l’économie réelle montrent une inflexion sensible, les sources principales de la déstabilisation sont financières : en particulier, des intermédiaires faibles et un marché mal régulé ont mal géré la croissance rapide des entrées de capitaux à court terme, à partir de 1993. Ceci s’est traduit par un cycle de surinvestissement et de sur-endettement dans le secteur manufacturier, ainsi que par une large bulle immobilière. A partir de 1996, des tensions de plus en plus visibles sont apparus dans le système financier, qui ont abouti à la crise de change de juillet 1997. La seconde partie de l’article analyse le développement de la crise à plus court terme, notamment le passage de la crise de liquidité, du système bancaire (été 1997) vers une grande partie de l’économie réelle (fin d’année). On a observé alors une rupture large de la discipline du crédit, qui s’est étendue à un grand nombre d’entreprises solvables, par une dynamique classique d’aléa moral ; cette situation sera très difficile à résorber ultérieurement. On souligne aussi les erreurs graves commises par la Banque centrale, d’abord dans la défense de l’ancrage du change, puis lors des injections incontrôlées de liquidité dans le système financier : les pertes totales peuvent être estimées à près de 23% du Pib. La dernière partie analyse les réponses plus cohérentes apportées à la crise, surtout à partir de novembre 1997 : restructuration et remise en fonctionnement du système financier, cadre macroéconomique.

Cet article introduit un modèle d'équilibre calculable, dynamique, à anticipations parfaites, de l'économie française du type WS-PS. Le modèle, au lieu d'être étalonné de façon à reproduire une année moyenne, l'est de manière à reproduire l'évolution de l'économie française sur la période 1974-1993. Ceci ne peut être fait que si nous introduisons un certain nombre de variables latentes ayant un sens économique. Les multiplicateurs dynamiques des principales mesures de politique économique sont alors calculés, ainsi que les effets sur l'emploi des altérations de ces politiques depuis 1974.

Incomes policy started with the San Valentine's decree of 1984, which marks the beginning of the process that led to the abolishment of Scala Mobile and reached its peak with the Protocollo d'intesa of 1993. The work proposes to study by cointegration analysis the effects of incomes policy on the short and long run equilibrium between real wages, labour productivity and unemployment. The analysis is based on ISTAT data relative to 1951-'95. The Johansen procedure detects only one cointegrating vector. The Engle and Granger procedure applied to real wages detects a near unitary coefficient for labour productivity and a negative elasticity of unemployment. For the after-1984 period, the procedure detects a statistically significant change in the coefficient of labour productivity, but not of unemployment. In the short run, the abolition of Scala Mobile and the introduction of concertazione coincided with a negative coefficient of productivity growth, which confirms the loss of purchasing power of wages, implicit in the national agreements. Nevertheless, the coefficient of residuals in the second step increases in absolute value in the period under consideration, suggesting a faster return to the long run equilibrium value. The relationship between real wages and unemployment does not seem to change though.

The Euro is an unprecedented innovation, which can only very partially be analysed with the theory of optimal monetary zones, nor most conventional approaches. It calls for an analysis integrating three domains and levels:the change in the rules of the game at theeuropean level, the impact upon the national institutional architecture and "régulation" modes and the transformations of domestic political arena. It is argued that various interpretations can be given to the Amsterdam Treaty and its implementations, the more so since the new institutional architecture is far from coherent, but quite on the contrary, political conflict and economic unbalance prone. The survey of the literature then deliver a method for generating a whole spectrum of scenario by combining three major hypotheses: the ex-post objectives pursued by the European Central Bank, the existence and extension of budgetary and political innovation in reaction to the Euro and finally the unequal ability of different societies to be reformed in line with the constraints and opportunities generated by the EMU. The very political and institutional deficits of the Amsterdam Treaty gives a low probability to totally rozy as well as to quite gloomy scenarios, but opens a quite uncertain process of trials and errors with possibly radical innovations which would complement the Euro. This essay concludes by suggesting some agenda for future negotiations about the European institutions.

Expliciter un cadre général d'analyse des évolutions institutionnelles contemporaines pour caractériser les grands traits d'un régime de croissance post fordiste, tel est l'objectif général du présent article. Après un rappel de quelques faits stylisés sur le régime de croissance contemporain et les changements structurels qui l'accompagne, on présente les outils d'analyse des changements institutionnels que propose la théorie de la Régulation. La lecture que nous en faisons insiste sur la prévalence à chaque période de certains changements institutionnels appartenant à l'une des cinq formes structurelles retenues. Cette hypothèse nous fournit un cadre d'analyse pour faire ressortir dans les évolutions institutionnelles le rôle prépondérant de la mutation des formes de concurrence, prises au sens large. A l'instar de ce que représenta la dynamique institutionnelle du rapport salarial dans la période précédente, la transformation des formes de concurrence conditionne aujourd'hui largement les évolutions des autres champs institutionnels. Ceci nous donne la trame générale qui sous-tend le schéma type d'un régime de croissance post fordiste. Mais ici encore différences historiques et structurelles laissent une place d'autant plus large à une déclinaison de ce shéma central par les trajectoires nationales, que la concurrence entre Etats-nations réduit l'espace des politiques structurelles d'ajustement au nouveau régime.

Brief introduction to the symposium highlighting the importance of price measurement for reliable productivity estimates. Accurate price indexes are essential for reliable productivity measurement. the author points out that a one percentage point upward bias in price changes results in a one percentage point downward bias in real output growth and by consequent productivity growth. An upward bias in price indexes implies that productivity growth is being underestimated.

This paper analyzes the East Asian Currency Crisis to examine what factors led to the crisis and the differential impact across countries. Empirical data of 7 Asian countries over the period 1990 – 1996 is examined. The sample of seven countries is divided into two categories; crisis countries and affected countries. Comparison of several economic indicators is made between these two categories to determine what factors led to the severe consequences in the crisis countries as opposed to affected countries, all of which were subject to contagion. The crisis countries were found to have had aggressive growth policies that were fuelled by reflationary strategies; particularly rapid monetary growth and capital inflows. With higher relative inflation and repressed interest rates, exchange rate equilibrium as dictated by purchasing power and interest rate parities were out of line given pegged exchange rates. The currencies had become overvalued. The result being current account deficits that were financed by capital inflows, increasingly in the form of short term foreign currency denominated loans. The combined impact of all of this had been to increase the crisis countries’ vulnerability to a speculative attack and a resulting self-fulfilling crisis.