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The macroeconomic prediction has extremely important, complex and difficult objectives in a competitive economy and that is due to a multitude of reasons. In this context, we estimated the fact that a key-role can be attribute to the anticipation and the projection of some essential balances of the development, process which is at the basis of the prospective study of the behaviors of the aggregate demand and offer – the concepts and the variables with the highest degree of generalization from the study of the economy and not only. We started in our study, from the analytical basics of the aggregate demand and offer, we pointed out the dependence of the production and of the prices on the interaction of the aggregate demand and offer, we used as working instruments the curves of the aggregate demand and supply and we outlines the consequences of the variation of the two sized under different circumstances.

The OPTIM model helps to forecast each month the growth rate of French GDP and its main components for the coincident quarter and the quarter ahead. The model uses a wide range of monthly macroeconomic data and survey data, selected by an automatic statistical procedure.

Wage shares have fallen substantially in Europe since the early 1980s. To some extent this is due to a macroeconomic policy package that encourages wage flexibility and wage competition. A system of wage coordination in the Euro area would facility a return to a productivity-oriented wage policy by reducing wage competition. In a recent study on the demand effects of changes in functional income distribution Stockhammer, Onaran und Ederer (2007) find that the Euro area is in a wage-led demand regime. According to their results a reduction of the wage share by 1%-point leads to a reduction of demand by around 0.2%-points of GDP. This finding has far reaching implications for economic policy. A stable wage share would help stabilize demand. The paper aims, first, at clarifying some conceptual issues in the design of a European system of productivity-oriented wage coordination and, second, it discusses the economic policy implications of wage coordination. The present policy package assigns wages the role of a shock absorber. However, as wage reductions do have negative demand effects in a wage-led demand regime, this policy has a deflationary bias. A system of wage coordination will thus have to be complemented by a more active nation fiscal policies and more fiscal redistribution within the EU. If so a regime of productivity oriented wage coordination will help to stabilize demand and it is consistent with price stability.

It is sometimes argued that news reports in the media suffer from biased reporting. Mullainathan and Shleifer (2002, 2005) argue that there are two types of media bias. One bias, called ideology, reflects a news outlet's desire to affect reader opinions in a particular direction. The second bias, referred to as 'spin' or 'slanting', reflects the outlet's attempt to simply create a memorable story. Competition between outlets can eliminate the effect of ideological bias, but increases the incentive to spin or slant stories. We examine whether we find some evidence of spin in Dutch newspaper reporting on the state of the economy. If newspapers are indeed able to create memorable stories this should, according to our hypothesis, affect the opinion of readers with respect to the state of the economy. Sentiments about the actual state of the economy could be magnified by spin. As a result, consumer confidence-a variable that routinely measures the opinion on the state of the economy-can be expected to be affected not only by economic fundamentals, but also by the way these fundamentals are reported. We construct a variable that reflects the way consumers perceive economic news reported in newspapers. We find that this variable indeed has a significant impact on consumer confidence, which is short-lived.

The most direct mechanism by which labour productivity affects living standards is through real wages, that is, wages adjusted to reflect the cost of living. Between 1980 and 2005, the median real earnings of Canadians workers stagnated, while labour productivity rose 37 per cent. This article analyzes the reasons for this situation. It identifies four factors of roughly equal importance: rising earning inequalities; falling terms of trade for labour; a decrease in labour’s share of GDP; and measurement issues.

Le modèle OPTIM permet de prévoir, chaque mois, les taux de croissance du PIB de la France et de ses principales composantes, pour le trimestre en cours et le trimestre suivant. Ce modèle mobilise un large éventail de données macro-économiques mensuelles et de données d’enquête, sélectionnées par une procédure statistique automatique.

The paper presents in the first part theoretical aspects regarding merchandise imports on one’s own account, on short term trade credit. In the second part it approaches a practical application of accounts related to merchandise imports on one’s own account, on short term trade credit. Foreign Trade Companies’ merchandise imports, as an indirect form of organizing foreign trade, contains the sum of operations by which merchandise necessary to the national economy is bought for production or individual consumption. Just like exporting, importing can be done by foreign trade companies on their own account, or on commission. In indirect importing, on foreign trade companies’ own account, the abovementioned act on foreign markets and onward on the internal market, in their own name, on their own account, and at their own risk. Thus, the financial results of the import activity are reflected, in full, in the administration of the importing foreign trade company. Merchandise imports bought on credit, i.e. imports for which payment is made at a particular date, is determined by the shortage of financial resources of the importer. It is common practice both for simple and complex merchandise, however, generally complex merchandise is more frequently the subject of on credit acquisitions.

An earlier study (Barro 2006) applied the Thomas A. Rietz (1988) insight on rare eco? nomic disasters to explain the equity premium and related asset-pricing puzzles. Key param? eters were the probability, p, of disaster and the distribution of disaster sizes, b. In the main analysis, p and the ?-distribution were assumed to be time invariant. An extension to time-vary? ing p is in Xavier Gabaix (2008). Because large macroeconomic disasters are rare, pinning down p and the ?-distribution from historical data requires long time series for many countries, along with the assumption of rough parameter stability over time and across countries. Barro (2006) relied on the long-term international GDP data for 35 countries from Angus Maddison (2003). Using the definition of an economic disaster as a peak-to-trough fall in per capita GDP by at least 15 percent, 60 disas? ters were found, corresponding to p ?* 0.017 per year. The average disaster size was 29 percent, and the empirical size distribution was used to calibrate a model of asset pricing. The underlying asset-pricing theory relates to consumption, C, rather than GDP. This distinc? tion is especially important for wars. For exam? ple, in the United Kingdom during the two world wars, GDP increased while C fell sharply?the difference representing mostly added military spending. Maddison (2003) provides national-accounts information only for GDP. Our initial idea was to add consumption, C, which we measure by personal consumer expenditure because of diffi? culties in separating durables from nondurables in the long-term data. We have not assembled data on government consumption, some of which may substitute for C and, thereby, affect asset pricing. However, this substitution is prob? ably unimportant for military outlays, which are the type of government spending that moves a lot during some disaster events. Maddison (2003) represents a monumental contribution for international studies using long term GDP data. However, although much of the information is sound, close examination revealed many problems. Specifically, Maddison tends to fill in missing data with doubtful assumptions, and this practice is often significant for major crises. As examples, Maddison assumed that Belgium's GDP during WWI and WWII moved with France's; that Mexico's GDP between 1910 and 1920, including the Revolution and Civil War, followed a smooth trend (with no crisis); that GDP for Colombia and Peru over more than a decade moved with the average of Brazil and Chile; and that GDP in Germany for the crucial years 1944-1946 followed a linear trend. There are also some mismatches between original works and published series for GDP in Japan at the end of WWII and Greece during WWII and its Civil War. Given these difficulties, our project expanded to estimating long-term GDP for many countries. The Maddison informa? tion was often usable, but superior estimates can be constructed in many cases. Also, results from recent major long-term national-accounts projects for some countries are now available, including Argentina, Brazil, Chile, Colombia, Greece, Norway, Spain, Sweden, and Taiwan. We are dealing with long-term national accounts data for 41 countries, but the current study applies to the 21 for which we have, thus far, assembled annual data on C and GDP from before WWI to 2006. (See Table 1 for a list of included countries and starting years.) We begin + Discussant: John Campbell, Harvard University.

A tanulmány nem az aktuális hitelpiaci válság enyhítésének kérdésével foglalkozik, hanem az amerikai gazdaság elmúlt négy évtizedének általános és az utolsó tíz évének konkrét beruházási-megtakarítási és növekedési tendenciáit igyekszik feltárni. Azt vizsgálja, hogy milyen mélyebb, belföldi eredetű szerkezeti okai vannak a nemzetközivé dagadt jelzáloghitel-válságnak. A cikk a nyitott gazdaság külső finanszírozással összefüggő mérlegazonosságainak alapján arra a következtetésre jut, hogy az ingatlanpiaci visszaesés és a kibocsátás zsugorodása az Egyesült Államok gazdaságában már több mint másfél évtizede kialakult kedvezőtlen, de még tovább romló belföldi megtakarítási folyamatok következménye. A jelzálogpiac krízise és a lakásépítés drámai visszaesése a túlfogyasztásra és túlhitelezésre ösztönző pénzügyi környezet eredménye. A lakáspiaci és a hitelezési ciklusok pénzügyi innovációkkal történő megnyújtása inkább növelte, mint csökkentette a kibocsátásingadozás érzékenységét. A legfőbb hitelezők Kína, Japán, Németország inkább dolláralapú amerikai vállalati felvásárlásokkal ellensúlyozták a dollárgyengülésből elszenvedett veszteségeiket. 1997-2007 között az Amerikából külföldön befektetett dolláraktívák - javarészt a valuta leértékelődése nyomán - jelentős hozamemelkedést élveztek, és számottevően tompították a belföldön képződött jövedelmek csökkenését. A dollárleértékelődés az eszköz- (és nemcsak az áruexport) oldalon is előnyöket hozott számos nagyvállalatnak. Journal of Economic Literature (JEL) kód: E20, E32, F34., Rather than dealing with the immediate policy steps to dampen the crisis, this paper attempts to reveal the worsening savings/consumption pattern of the US economy over the last ten years. Based on the closed logic of open-economy GDP-accounting, it argues that the current crisis is deeply rooted in shrinking public and private savings trends discernible as early as 1997. The current mortgage-market crisis and deep fall in new residential housing are products of a distorted financial environment that encourages over-borrowing and over-consumption. Expansion of the credit cycle through successive financial innovations has increased, not decreased output volatility. But the main foreign lenders to the USJapan, China and Germanyhave managed to offset their losses on US securities by buying into US companies. Large US firms have also benefited from rapid dollar depreciation as USD-denominated yields on their foreign assets experienced strong run-ups. The weak dollar has also helped American firms with large assets on foreign markets. So there were strong benefits for the US, not just on the goods-export side, but on the asset side, an aspect rarely emphasized.

El objetivo de este artículo es comprender la tendencia dominante de la historia de la macroeconomía. Se trata entonces de identificar las dos vías que ha seguido la investigación de los fundamentos microeconómicos de la macroeconomía: de una parte la relación entre empleo, salario e inflación (vía señalada por Friedman) y, de otra parte, la existencia de rigideces o de una restricción monetaria (vía señalada por Clower). The aim of this article is to analyze the dominant tendency in the history of macroeconomics. It attempts to identify the two routes that research on the microeconomic foundations of macroeconomics has followed. On the one hand, the relation between employment, wages and inflation (the route indicated by Friedman); on the other hand, the existence of rigidities or a monetary restriction (the route indicated by Clower). L'objectif de cet article est de comprendre la tendance dominante de l'histoire récente de la macroéconomie. Il s'agit alors d'identifier les deux voies qu.a suivies la recherche des fondements microéconomiques de la macroéconomie: d'une part la relation entre emploi, salaire et inflation (à la suite de Friedman) et, d'autre part, l'existence de rigidités ou d'une contrainte monétaire (à la suite de Clower).

This paper studies equilibrium portfolios in the standard neoclassical growth model under uncertainty with heterogeneous agents and dynamically complete markets. Preferences are purposely restricted to be quasi-homothetic. The main source of heterogeneity across agents is due to different endowments of shares of the representative firm at date 0. Fixing portfolios is the optimal equilibrium strategy in stationary endowment economies with dynamically complete markets. However, when the environment displays changing degrees of heterogeneity across agents, the trading strategy of fixed portfolios cannot be optimal in equilibrium. Very importantly, our framework can generate changing heterogeneity if and only if either minimum consumption requirements are not zero or labor income is not zero and the value of human and non-human wealth are linearly independent.

Judd et al. (J Finance 63: 2203–2217, 2003) show that the stationary Lucas tree model cannot generate nontrivial asset trading: Heterogenous agents will optimally choose a fixed portfolio after initial rebalancing. This paper explores asset trading volume in production economies with heterogeneous agents and dynamically complete market structures. We establish a recursive version of the Negishi approach to prove the existence of a competitive equilibrium. Furthermore, we develop a general method to solve for equilibrium portfolios in production economies within a fairly general set of complete market structures. We thus establish the theoretical reasons why production economies in general generate a nontrivial volume of asset trading even if heterogeneity of the agents is kept to a minimum.

This paper compares the growth prospects of China and India through a growth accounting analysis. Consistent time series for capital stock and employment are constructed using available survey data, and recent revisions to the national accounts for both countries are incorporated. The results allow for a discussion of the sources of growth in both countries, and a consideration of each country's rate of potential growth in light of the outlook for national savings, as demographic shifts occur in each country.

The Impact of Interprovincial Migration on Aggregate Output and Labour Productivity in Canada, 1987-2006, Interprovincial migration has increased significantly in Canada since 2003. This article develops a methodology to estimate total output gains due to interprovincial migration from two sources: gains due to increased employment, and gains due to re-allocation of workers between provinces with different productivity levels. It estimates that in 2006 the net output gains arising from interprovincial migration were $883.1 million (1997 constant prices), or 0.074 per cent of GDP. Higher employment rates in provinces experiencing a net positive balance of interprovincial migrants were responsible for $398.0 million of the gains and higher output per worker in these provinces was responsible for $485.0 million.

The Collapse of Capitalism (COC) Theory, usually supported by leftist people, is being denied by economic fundamentals facts and corporate profit data. Any constrictive or critical circumstance claimed as threatening the status quo has been efficiently redirected toward labour force exploitation. The way in which capitalist model can survive and improve is by mean of slow growth of wages and salaries (progressive decrease of their real purchasing power) and the labour rights removal, even inside richest countries, as the United States.

Productivity growth is the main long-run determinant of living standards. However, there are some distinctions between productivity growth as conventionally measured and the potential of the economy to raise living standards. Specifically, insofar as the share of depreciation in output increases, the rate of productivity growth will exceed the potential growth rate of living standards. The same will be the case if prices for investment goods decline relative to prices for consumption goods. This article adjusts for these factors to develop the concept of “sustainable consumption,” and compares trends in this variable with productivity growth in OECD countries for the 1980-2005 period.

In this work we determine the seasonal integration order of four macroeconomic variables in Mexico, with and without endogenously determined structural change. The models suggested by Hylleberg, Engle, Granger & Yoo (1990) and Franses & Vogelsang (1998) are applied. Following those models, including structural change, the results show reduced unit roots for the four variables. We find out that the four variables have zero frequency unit roots, while the GDP and government consumption expenditure have, also, quarterly seasonal unit roots.

Savings are a huge boon for the economy. This means both growth today and prospects for growth tomorrow. This is both an investment resource and a medicine for inflation. However, mistakes made in managing the savings by economic authorities, may turn everything upside down and then the savings become a cause of inflation and many other economic woes. This is exactly what happened in the far-off 1992 in Russia. Two approaches: reliable tools and advantages of the bond type form of savings would enable Russia to quickly create a significant stock of «long» money and increase the GDP and, at the same time, significantly reduce inflation.

Kein Abstract vorhanden, + ID der Publikation: hslu_76839 + Art des Beitrages: Wissenschaftliche Medien + Jahrgang: 68 + Sprache: Deutsch + Letzte Aktualisierung: 2020-07-16 16:10:35

Savings are a huge boon for the economy. This means both growth today and prospects for growth tomorrow. This is both an investment resource and a medicine for inflation. However, mistakes made in managing the savings by economic authorities, may turn everything upside down and then the savings become a cause of inflation and many other economic woes. This is exactly what happened in the far-off 1992 in Russia. Two approaches: reliable tools and advantages of the bond type form of savings would enable Russia to quickly create a significant stock of «long» money and increase the GDP and, at the same time, significantly reduce inflation.

This paper analyzes the effects of a change in a small but time-varying “disaster risk” à la Gourio (2012) in a New Keynesian model. Real business cycle models featuring disaster risk have been successful in replicating observed moments of equity premia, yet their macroeconomic responses are highly sensitive to the chosen value of the elasticity of intertemporal substitution (EIS). In particular, we show here that an increase in the probability of disaster causes a recession only when imposing an EIS larger than unity, which may be arbitrarily large. Nevertheless, we also find that incorporating sticky prices allows to conciliate recessionary effects of the disaster risk with a plausible value of the EIS. The disaster risk shock causes endogenous shifts in preferences which provide a rationale for discount factor first- (Christiano et al., 2011) and second- (Basu and Bundick, 2014) moment shocks.

This paper shows how a disorderly-working bank-based payment system negatively affects monetary stability. This occurs when firms invest their profits in production with the aim of forming and accumulating (fixed) capital, while at the same time banks carry out the payment of workers’ wages and enter the corresponding payment order in the architecture for domestic payments. In fact, if the payment of wages is financed with profits, this payment operation corresponds to an emission of (empty) money without it being endowed with value, to wit, purchasing power. It follows that the existing value of money is “diluted” in a greater amount of money units, so much so that the current purchasing power of each unit of money is reduced. This monetary phenomenon can be defined as inflation, which, in turn, exerts an upward pressure on the general price level. A structural reform of the bank-based payment system, as suggested in this paper, may consequently improve the defective architecture for domestic payments and thereby promote long-run monetary stability.

This paper, an extension of the Presidential Address to the International Economic Association, evaluates alternative strands of macro-economics in terms of the three basic questions posed by deep downturns: What is the source of large perturbations? How can we explain the magnitude of volatility? How do we explain persistence? The paper argues that while real business cycles and New Keynesian theories with nominal rigidities may help explain certain historical episodes, alternative strands of New Keynesian economics focusing on financial market imperfections, credit, and real rigidities provides a more convincing interpretation of deep downturns, such as the Great Depression and the Great Recession, giving a more plausible explanation of the origins of downturns, their depth and duration. Since excessive credit expansions have preceded many deep downturns, particularly important is an understanding of finance, the credit creation process and banking, which in a modern economy are markedly different from the way envisioned in more traditional models.

We introduce the heterogeneities of EIS (elasticities of intertemporal substitution) into the Ramsey version of macrodynamic model with a finite number of agents. The assumption that the degrees of EIS differ among agents means that our economy has various growth rate of private consumption. Then, our contributions are as follows. First, we analytically characterize the steady-state levels of individual capital. Second, we analytically examine the role of heterogeneous EIS for the wealth inequality. Finally, we give numerical examples to see the complicated dynamic motion and the steady-state characterization of wealth inequality.

We propose a theory of low-frequency movements in unemployment based on asymmetric real wage rigidities. The theory generates two main predictions: long-run unemployment increases with (i) a fall in long-run productivity growth and (ii) a rise in the variance of productivity growth. Evidence based on U.S. time series and on an international panel strongly supports these predictions. The empirical specifications featuring the variance of productivity growth can account for two U.S. episodes which a linear model based only on long-run productivity growth cannot fully explain. These are the decline in long-run unemployment over the 1980s and its rise during the late 2000s.

The quantum macroeconomics theory is formulated for the first time, assuming that the business cycle has the discrete-time oscillations spectrum in analogy with the electronics excitations discrete-time spectrum in the Bohr’s atom model in the quantum physics. The quantum macroeconomics theory postulates that the discrete-time transitions from one level of GIP((t), GDP(t), GNP(t) to another level of GIP((t), GDP(t), GNP(t) will occur in the nonlinear dynamic economic systems at the time, when: 1) The land, labour and capital resources are added / released to the production/service processes in the form of quanta; 2) The disruptive scientific/technological/financial/social/political innovation is introduced, creating the resonance conditions necessary to amplify/attenuate the value of GIP((t), GDP(t), GNP(t), during the evolution process of the nonlinear dynamic economic system in the time domain. The authors think that the general information product on the time GIP((t), the general domestic product on the time GDP(t), and the general national product on the time GNP(t), are the discrete-time digital signals (the Ledenyov discrete-time digital waves with the Markov information) in distinction from the continuous-time signals (the Kitchin, Juglar, Kuznets, Kondratieff continuous waves), because of the discrete-time nature of the disruptive scientific/technological/financial/social/political innovations. The authors apply the quantum macroeconomics theory to research and develop a new software program for the accurate characterization and forecasting of GIP((t), GDP(t), GNP(t) dependences changes in the economies of scales and scopes in the time domain for the use by the central / commercial banks.

Distributional comparative statics is the study of how individual decisions and equilibrium outcomes vary with changes in the distribution of economic parameters (income, wealth, productivity, information, etc.). This article develops new tools to address such issues and illustrates their usefulness in applications. The central development is a condition called quasi-concave differences, which implies concavity of the policy function in optimization problems without imposing differentiability or quasi-concavity conditions. The general take-away is that many distributional questions in economics which cannot be solved by direct calculations or the implicit function theorem, can be addressed easily with this article’s methods. Several applications demonstrate this: the article shows how increased uncertainty affects the set of equilibria in Bayesian games; it shows how increased dispersion of productivities affects output in the model of Melitz (2003); and it generalizes Carroll and Kimball (1996)’s result on concave consumption functions to the Aiyagari (1994) setting with borrowing constraints.

Many important games are aggregative allowing for robust comparative statics analysis even when a game does not exhibit strategic complements or substitutes (Acemoglu and Jensen (2013)). This paper establishes such comparative statics results for contests improving upon existing results by (i) allowing payoff functions to be discontinuous at the origin, and (ii) allowing for asymmetric rent-seeking contests and patent races. A leading example where (i) is relevant is the classical Tullock contest (Tullock (1980)). The paper also studies existence and uniqueness of equilibria extending the results of Szidarovszky and Okuguchi (1997) and Cornes and Hartley (2005) to patent races.

Zusammenfassung Aufwind im Westen der MOSOEL In den mittel-, ost- und südosteuropäischen Ländern (MOSOEL) klafft der Ausblick für das Wirtschaftswachstum auch weiterhin auseinander für die meisten der neuen EU-Mitgliedstaaten (NMS) wird eine langsame Beschleunigung des BIP-Wachstums beginnend mit diesem Jahr erwartet. Für 2015 soll das Wachstum durchschnittlich auf 3% ansteigen, um 0,2 Prozentpunkte mehr als im Vorjahr. Die Erholung erfolgt um ein Jahr früher als erwartet. Wesentlicher Faktor ist die bessere Entwicklung in der Eurozone. Auch am Westbalkan wird eine (wenn auch weniger dynamische) Verbesserung der Wachstumsaussichten für die gesamte Prognoseperiode 2015-2017 erwartet. Die wirtschaftliche Entwicklung 2015 in Weißrussland, Kasachstan, Russland und der Ukraine wird düster ausfallen und zum Teil noch schlechter sein als bisher erwartet. Für diese Länder sind die mittelfristigen Wirtschaftsaussichten auch mit substantiellen Risiken behaftet. Insgesamt sollte aber das verstärkte Wachstum in den MOSOEL für die österreichische Wirtschaft als Nachfrageimpuls dienen. Insbesondere die NMS sind für Österreich von zunehmender Bedeutung. English Summary Western CESEE countries in the ascendant The outlook for GDP growth in the Central, East and Southeast Europe (CESEE) region remains divergent we expect a gradual acceleration of GDP growth for most of the EU’s new Member States (NMS) starting this year. For 2015 growth is expected to increase to 3% on average, by 0.2 pp more as compared to last year. The recovery comes a year earlier than expected mainly based on favourable developments in the euro area. In the Western Balkans growth prospects will also improve over the whole forecast period 2015-2017, though slightly less dynamically. Growth performance in Belarus, Kazakhstan, Russia and Ukraine in 2015, however, will be dismal and partly worse than expected; the medium-term outlook for these countries is also fairly uncertain with considerable downside risks. Overall though, we should expect stronger CESEE growth to act as a demand stimulus for the Austrian economy. The NMS in particular are of increasing importance for Austria.

The Great Recession and the subsequent European crisis may have long-lasting effects on aggregate demand, aggregate supply, and, hence, on macroeconomic performance over the medium and long-run. Besides the fact that financial crisis last longer and are succeeded by slower recoveries, and apart from the hysteresis effects that may operate after episodes of long-term unemployment, the combination of high (public and private) debt and low population and productivity growth may create significant constraints for monetary and fiscal policies. In this paper I develop an OLG model, one earlier used by Eggertsson and Mehrotra (2014) to rationalize the "secular stagnation hypothesis", to show how high debt, and low population and productivity growth may condition the macroeconomic performance of some European countries over the medium and long-run. JEL Classification: E20, E43, E52, E66

In this study, we examine the connection between economic growth and debt, with the question in mind -“Is debt a burden and bad for economic growth? Employing several sophisticated statistical approaches to investigate the problem and to assess the impact of debt on economic growth in 48 countries of Sub-Saharan Africa from 1995 to 2012, we find evidence of Granger causality between debt and economic growth in 8 out of the 48 sub-Saharan countries during the period of study and validate for the existence of “Debt Laffer Curve.” We also study the relationship between debt and economic growth rate in Granger causality and Dynamic Arellano-Bond panel data estimation frameworks, and find evidence of a negative correlation between the two variables (Debt and GDP) and confirm the findings by testing several versions of the models. Political decision and economic policy are intertwined and need to be examined carefully when implemented for economic growth and our findings lend credence to the politically unpopular austerity measures (constraints on government spending financed by borrowing). There is a limit to the economic growth rate that the government financed expenditure can bring. If the burden of debt is too high then there is a negative impact of debt on the economic growth.Keywords. Economic Growth, Debt, Laffer curve and Investments.JEL. E20, E60, E24.

Although federal deficits have shrunk markedly in recent years, increased spending for Social Security and major health care programs, along with increasing interest costs, would cause debt to rise steadily over the long term. The larger deficits would cause federal debt to grow faster than the economy. By 2040, CBO projects debt would be more than 100 percent of GDP and continue on an upward path—a trend that cannot be sustained indefinitely.

Using a panel of 38 economies, over the period 2001–2010, we analyse the link between different facets of education and diversification in international portfolios. We find that university education, mathematical numeracy, in addition to financial skill, play an important role in reducing home bias. After separating countries according to their level of financial development, we find that less developed economies with more university graduates, or with higher level of mathematical numeracy, have lower level of local equity bias compared to more developed countries. We also find that the beneficial effect of education is more pronounced during the most recent financial crisis, especially for economies with less developed financial markets.

The European Union (EU) is a political and economic union of democratic European countries. One of his goals was and is to equalize living conditions in all countries. Unfortunately, it is not. Today, still, there are clear disparities both economic and social. It is worth a closer look, how does the situation in the UE at the national level. The aim of this study is to analyze the most current size selected macroeconomic and social at the EU member states to show that, despite the common policy of these countries are different.

Piketty argues that there are long-run fundamental laws in capitalism that will necessarily concentrate the income in favor of the privileged 1 or 10% of the population. Piketty's two fundamental laws are really theoretical propositions that presume relative rigidity in the rate of return of capital and in the net savings rate. We show that such propositions are incompatible with seventy-five years of studies estimating the value of the elasticity of substitution between capital and labor, and with the theoretical models of savings optimizing behavior. We argue that Piketty's laws are wrong and that they contradict the essence of market dynamics. Economic agents optimize and neither the rate of return of capital nor the net savings rate can remain relatively stable as Piketty supposes. Using empirical estimates of the long-run elasticity of substitution between capital and labor, and analyzing the relationship between the net savings rate and the real growth rate of the economy, we show that Piketty's forecast for the second half of the twenty-first century is inadequate. We propose alternative forecasts.

A stock-flow consistent and simple methodological account of the influence of financial markets over the real economy is here presented. Based on an original interpretation of the basic heterogeneity in relationship and shadow banking operations, often referred to as OTH vs. OTD banking models, this methodological article develops an accounting model that emphasizes the interdependencies in entrepreneurs’ variations in animal spirits, financial institutions’ liquidity risk management, and households’ effective demand. The model captures the idea that fluctuations in the composition of property incomes lead to fluctuations in borrowing for non-financial purposes that, in their turn, drive fluctuations in spending. The model is so devised as to allow a tidy comparison in the role played by relationship or shadow banking over the dynamism of a depressed economy.

We show that an otherwise standard one-sector real business cycle model with variable capital utilization and mild increasing returns-to-scale is able to generate qualitatively as well as quantitatively realistic aggregate fluctuations driven by news shocks to two formulations of future consumption demand or government spending on goods and services. In sharp contrast to many studies in the existing expectations-driven business cycle literature, this result does not rely on non-separable preferences or investment adjustment costs. When the economy is subject to anticipated total factor productivity or investment-specific technology shocks, the relative strength of the intertemporal substitution effect needs to be enhanced for our model to exhibit positive macroeconomic co-movement and business cycle statistics that are consistent with the data.

Growth in the CESEE region will follow the unimpressive pattern displayed by the euro area. The longer-term convergence of income levels in the CESEE countries can no longer be expected to be as rapid as was assumed a decade or so ago. Growth in the period 2015-2017 is not going to deviate substantially from the pace recorded in 2014. For the new EU Member States growth is expected to remain slightly below 3% in the years to come. This implies an average growth differential of about 1.5 percentage points as compared to the euro area – about half of what it was before the global financial crisis. On the other hand, most of the countries in the region are also expected to evade the dangers of runaway inflation, fiscal deficits or excessive foreign borrowing that often plagued them in the past. These are the main results of the newly released medium-term growth forecast for the region by the Vienna Institute for International Economic Studies (wiiw). Depressed aggregate domestic demand has been the major factor behind anaemic growth. This is evidenced by disinflation (or even mildly deflationary tendencies) across much of the region, as well as the persistence of fairly high unemployment. There is some evidence of a ‘race to the bottom’ in terms of wage setting. While wage moderation strengthens profitability and external competitiveness, it also weakens disposable household incomes and thus slows down growth in domestic demand. Apparently, there is a trade-off between improvements in the trade balance and more rapid growth in domestic demand. Overall, GDP growth is being held ‘on a short leash’. Growth in public investment may be supporting economic growth, especially in those new EU Member States (NMS) that have access to EU funds. However, a proper rebound in private-sector investment is still lacking. Weak private-sector investment cannot be attributed to a ‘profit squeeze’ in the corporate sector. On the contrary, the corporate sector has been doing very well, at least in those NMS for which relevant data are available. The corporate sector as a whole still tends to lend rather than borrow. The means available to the corporate sector appear to be plentiful at present – but the sector still prefers to lick its wounds inflicted by former excessive borrowing or extend loans (primarily to the public sector) rather than to invest productively. Loans are stagnant even in those instances where interest rates are relatively low. With a few exceptions (largely on the region’s periphery) the stocks of loans to the non-financial corporate sector increased marginally at best in 2014. This may reflect firms’ pessimistic assessment of future growth in demand, increased ‘liquidity preference’ or the relative abundance of the means at their disposal. Non-performing loans are linked to a high share of borrowing in foreign currencies. The recent strengthening of the Swiss franc will bear some negative consequences for those firms and households that borrowed heavily in that currency in the past. New evidence supports the claim that the countries with floating exchange rates fare better in the medium to long term. They tend to avoid irreversible currency overvaluation, whereas the countries with fixed exchange rates do not quite avert it. It is argued, however, that despite the rigidity of the exchange rates, overvaluation can be avoided – at least in the medium term. All the CESEE countries are running up fiscal deficits. Current account deficits are still depressed. Net national lending in the NMS tends to be positive. This is a consequence of current savings in the private sector in the NMS generally running ahead of gross fixed capital formation in that sector. On average, output growth across the NMS will become more uniform in 2015 – albeit not any faster. Average growth will remain at 2.7% in 2015. Some acceleration in marginal growth is to be expected in the biennium 2016-2017. Unemployment in the NMS will recede only gradually. Low inflation will prevail in 2015, but it will gradually return to more normal levels in 2016. Under sustained – albeit rather anaemic – growth, the current account balances will deteriorate (although they will still remain comparatively low). Growth is hardly accelerating in the (current and potential) EU candidate countries either. Output in those countries is not expected to grow faster than in the NMS. Turkey, Macedonia and Kosovo may fare slightly better than the rest of the group, with growth rates of above 3% in 2015. However, with the exception of Turkey, those countries seem to have put high inflation behind them. Nonetheless, their unemployment figures continue to be dismal (less so only in Turkey). They will also run high (or even very high) current account deficits. Most of the successor states to the Soviet Union will perform rather badly in 2015. Ukraine’s output will continue its free fall as many of the country’s industrial centres have become battlefields. A drop of 5% in economic growth is expected for 2015. The decline in world market prices for energy carriers will negatively affect both Kazakhstan and Russia, with real output in the latter country dropping sharply by almost 4% in 2015. A similar fate will befall Belarus a country that relies heavily on exports to Russia and Ukraine. However, assuming a peaceful resolution to the Ukrainian conflict in 2015, it is expected that all the successor states will resume moderate growth in 2016 or 2017.

référence interne : A2016.26; International audience; This paper quantitatively assesses the interaction between permanent immigration into France and France's macroeconomic performance as seen through its GDP per capita and its unemployment rate. It takes advantage of a new database where immigration is measured by the flow of newly-issued long-term residence permits, categorized by both the nationality of the immigrant and the reason the permit was issued. Using a VAR model estimation of monthly data over the period 1994-2008, we find that immigration flow significantly responds to France's macroeconomic performance: positively to the country's GDP per capita and negatively to its unemployment rate. At the same time, we find that immigration itself increases France's GDP per capita, particularly in the case of family immigration. This family immigration also reduces the country's unemployment rate, especially when the families come from developing countries.

We study the optimal growth path of a natural resource rich country, which can borrow from international financial markets. More precisely, we explore to what extent international borrowing can overcome resource scarcity in a small open economy, in order to have sustainable growth. First, this paper presents a benchmark model with a constant interest rate. We then introduce techni-cal progress to see if the economy's growth can be sustainable in the long-run. Secondly, we analyse the case of a debt elastic interest rate, with a constant price of natural resources and then with increasing prices. The main finding of this paper is that borrowing on international capital markets does not permit sustainable growth for a country with exhaustible natural resources, when the interest rate is constant. Nevertheless, when we endogenize the interest rate the consumption growth rate can be positive before declining.

CBO’s estimate of the output gap—the percentage difference between actual and potential output—gauges slack or overheating in the economy. For the latter half of its 10-year projection period, CBO projects that actual output will grow at the same rate as potential output but fall short of potential by about half a percent, on average—matching the average estimated gap between actual and potential output from 1961 to 2009.

This paper investigates the inconsistent treatment of financial services in the national accounts. While net interest income from financial intermediation is netted out as input to other industries and thus does not affect the overall level and trend of Gross Domestic Product (GDP), fee-based net income from financial services is included as value-added, inflating GDP by the same amount. A new measure of economic activity which resolves this inconsistency is introduced, treating all financial income as a cost or intermediate input to the rest of the economy. The resulting aggregate tracks employment and median income far more closely than GDP.

Does expected deflation lead to a fall in consumption spending? Using data for U.S. grocery store sales and department store sales from 1919 to 1939, this paper shows that expected price changes have asymmetric effects on consumption spending. Department store sales (durable consumption) react negatively to the expectation of falling prices, but grocery store sales (non-durable consumption) do not react to expected price changes.

Working time accounts (WTAs) allow firms to smooth hours worked over time. This paper analyzes whether this increase in flexibility has also affected how firms adjust employment in Germany. Using a rich microeconomic dataset, we show that firms with WTAs show a similar separation and hiring behavior in response to revenue changes as firms without WTAs. One possible explanation is that firms without WTAs used short-time work instead to adjust hours worked. However, we find that firms with WTAs use short-time work more than firms without WTAs. These findings call into question the popular hypothesis that WTAs were the key driver of the unusually small increase in German unemployment in the Great Recession.

CBO projects that, under current law, the federal budget deficit will fall to $468 billion in 2015 – 2.6 percent of GDP – and remain roughly stable, as a percentage of GDP, through 2018. After that, the gap between spending and revenues is projected to grow, raising the already high level of federal debt. CBO anticipates that, under current law, economic activity will expand at a solid pace in 2015 and the next few years, reducing the amount of underused resources, or “slack,†in the economy.

The recent discovery of the Ledenyov digital waves in the economies of scale and scope led to an origination of considerable scientific interest in the modeling of new types of the discrete-time digital signals generators for the business cycles generation in the macroeconomics. Article aims: 1) to model the discrete-time digital signals generators for the business cycles generation in the macroeconomics, 2) to demonstrate the technical differences between the new model of the discrete-time digital signals generator and the existing models of the continuous-time (continuous wave) signals generators in the macroeconomics; 3) to accurately analyze the spectrum of discrete-time digital signals in the economies of scale and scope, 4) to improve the Ledenyov discrete time digital signals theory to precisely characterize the discrete time digital signals in the macroeconomics, 5) to better develop the complex software program to forecast the business cycles, going from the spectral analysis of the discrete time digital signals and the continuous time signals in the nonlinear dynamic economic system over the selected time period. The developed MicroSA software program intends: 1) to perform the spectrum analysis of the discrete-time digital signals and the continuous-time signals in the macroeconomics; 2) to make the computer modeling and to forecast the business cycles, going from the spectral analysis of the discrete time signals and the continuous time signals in the macroeconomics. The MicroSA can be used by a) the central banks with the purpose to make the strategic decisions on the monetary policies, financial stability policies, and b) the commercial/investment banks with the aim to make the business decisions on the minimum capital allocation, countercyclical capital buffer creation, and capital investments.

This paper provides new empirical insights on the joint distribution of consumption, income, and wealth in three of the poorest countries in the world ? Malawi, Tanzania, and Uganda ? all located in Sub-Saharan Africa (SSA). The first finding is that while income inequality is similar to that of the United States (US), wealth inequality is barely one-third that of the US. Similarly, while the top of the income distribution (1 and 10 percent) earns a similar share of total income in SSA as in the US, the share of total wealth accumulated by the income-rich in SSA is one-fifth of its US counterpart. The main contributions of the paper are to document: (i) this dwarfed transmission from income to wealth, which suggests that SSA households face a larger inability to save and accumulate wealth compared with US households; and (ii) a lower transmission from income to consumption inequality, which suggests the presence of powerful institutions that favor consumption insurance to the detriment of saving. These features are more relevant for rural areas, which represent roughly four-fifths of the total population. The paper identifies the few successful pockets of the SSA population that are able to accumulate wealth by exploring sources of inequality such as age, education, migration, borrowing ability, and societal systems.

Many researches and practical experiences clearly indicate the existence of a strong relationship between entrepreneurial activities and the business environment in which these activities are initiated. Although this topic has been quite ignored until the late twentieth century, a lot of studies and consulting practice have contributed to the fact that there are now a number of theories concerning mentioned correlation. These theories aim to offer a model that would provide better utilization of the possibilities from the business environment which could be very important for the development from both macroeconomic and microeconomic aspects. An increasing number of articles on this topic says enough about its importance, and numerous researches by many reputable globally recognized institutions go in favor of this claim. There are many indicators that observe the economic situation in a country or a region from different aspects, so the analyses of these indicators make it possible to determine the specific relationships between entrepreneurial activities and the local and the global business environment. Given the complexity of these relations, the impact cannot be observed partially, without taking into consideration other important factors, but more detailed analyses, however, result in some useful conclusions, which in the proper context can have a positive impact on many economic factors. It is very important to emphasize the fact that the correlation between the business environment and entrepreneurial activities is bidirectional, since this influence is mutual, so that changes in one of these factors can and usually cause some modifications in the other. Frequent series of such iterations actually lead to changes in the business environment, while entrepreneurial activity changes its shape and affects the economy of a country or a region, which is of particular importance for its competitiveness in the era of globalization.

This paper investigates the impact of lower mortgage rates on household balance sheets and other economic outcomes during the housing crisis. We use proprietary loan-level panel data matched to consumer credit records using borrowers' Social Security numbers, which allows for accurate measurement of the effects. Our main focus is on borrowers with agency loans, which constitute the vast majority of U.S. mortgage borrowers. Relying on variation in the timing of resets of adjustable rate mortgages, we find that a sizable decline in mortgage payments ($150 per month on average) induces a significant drop in mortgage defaults, an increase in new financing of durable consumption (auto purchases) of more than 10% in relative terms, and an overall improvement in household credit standing. New financing of durable consumption by borrowers with lower housing wealth responds more to mortgage payment reduction relative to wealthier households. Credit-constrained households initially use more than 70% of the extra liquidity generated by mortgage rate reductions to repay credit card debt-- a deleveraging response that can significantly restrict the ability of monetary policy to stimulate these households' consumption. These findings also qualitatively hold in a sample of less-prevalent borrowers with private non-agency loans. We then use regional variation in mortgage contract types to explore the impact of lower mortgage rates on broader economic outcomes. Regions more exposed to mortgage rate declines saw a relatively faster recovery in house prices, increased durable (auto) consumption, and increased employment growth, with responses concentrated in the non-tradable sector. Our findings have implications for the pass-through of monetary policy to the real economy through mortgage contracts and household balance sheets.

Basierend auf der Unternehmensdemografie des Statistischen Bundesamtes (Rink et al. 2013) und den Daten zu den Gründungs- und Schließungsraten von Unternehmen wird von den Autoren der Versuch unternommen, die Unternehmensentwicklung nach Wirtschaftszweigen im Modellkontext INFORGE besser abzubilden. Der Ansatz berücksichtigt Gründungen, Schließungen und sonstige Vorgänge (u. a. Ausgliederung, Übernahme und Reaktivierungen) für Unternehmen nach Wirtschaftsabschnitten (WZ 2008). Weiterhin werden zur Interpretation der Ergebnisse Kennzahlen gebildet. Mit der Methode lassen sich Fragen zur Dimension der unternehmensdemografischen Prozesse, zur Entwicklung der Unternehmenszahlen und zu den Folgen für die Unternehmensgröße bezogen auf Produktion oder Anzahl der Erwerbstätigen beantworten. Erste Ergebnisse zeigen, dass die Zahl an Handelsunternehmen weiter abnehmen, die Menge von Unternehmen bei Freiberuflern und sonstigen Dienstleistungen hingegen steigen werden. Im Bereich des Produzierenden Gewerbes kann nur die Energieversorgung und die Bauwirtschaft an Unternehmen zulegen. Bis auf die Bauwirtschaft zeigen alle Wirtschaftszweige konsistente Entwicklungen.