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Purpose: A systematic review of the literature on circular business models was performed, for synthesis of what it reveals about the role and value of data in those models. The increasing quantity of supply-chain and life-cycle data available has potential to be a significant driver of circular business models. The paper describes the current state of knowledge and identifies avenues for further research related to use of various forms of data in the models. Design: A systematic review of literature on the use of data in circular business models was carried out, to inform understanding of the state of knowledge and provide a firm foundation for further research. Findings: The literature reviewed points to fragmented understanding of the role and value of data in circular business models. Nonetheless, scholars and practitioners commonly see data as a driver and enabler of circular economy. The article identifies two distinct approaches to value for data as presented in the corpus and discusses what types of data seem to be valuable in a circular business-model context. Among the further research opportunities are work on data as a source of business-model innovation and on collaboration in capturing the value of data in circular business models. Value: The study provides new insight on the nexus of circular business models and data, and it represents one of the first comprehensive reviews addressing data's value in a networked circular-economy context. [ABSTRACT FROM AUTHOR]

Circular flow analysis in mid-18th century France is normally associated with the writings of François Quesnay. From the early 1750 s, however, François Véron de Forbonnais developed a distinct theory of circulation in then well-known contributions to the Encyclopédie and his Elémens du commerce of 1754. This article argues that like Quesnay, Forbonnais was in part inspired by Cantillon's Essay on the Nature of Trade in General. But while Quesnay gave original developments to the real aspects of Cantillon"s analysis of circulation, Forbonnais focussed on developing monetary aspects, including arguments for the 'non-neutrality' of money and an original theory of the money interest rate. [ABSTRACT FROM AUTHOR]

The paper explores the case for monetary and fiscal unification. Monetary policy suffers from an inflation bias because the monetary authorities are not able to commit. With international risk sharing, fiscal discipline suffers from moral hazard, An inflation target alleviates the inflation bias but weakens fiscal discipline. In a monetary union, however, this adverse effect on fiscal discipline is weaker. This advantage of monetary unification may outweigh the disadvantage of not being able to employ monetary policy to stabilize country-specific shocks. While monetary unification may thus be optimal. international risk sharing may be undesirable because it weakens fiscal discipline. [ABSTRACT FROM AUTHOR]

This paper explores several issues concerning a possible zero lower bound (ZLB) including its theoretical rationale; the magnitude of effects of low sustained inflation on real interest rates: the validity of analyzing monetary policy in models with no monetary variables; and the dynamic stabilizing properties of Taylor rules in a ZLB context. The most important argument, however, is that if the short nominal rate is immobilized at zero, there nevertheless exists a route for monetary stabilization policy to be effective--via the foreign exchange market. Its quantitative importance is examined in a calibrated, optimizing, open-economy model. [ABSTRACT FROM AUTHOR]

This article presents a comment on the article "Three Lessons for Monetary Policy in a Low-Inflation Era." The author notes that the primary contribution presented by the paper was the conclusion that an economy can reach a state in which accelerating deflation cannot be stopped by normal monetary policy and that the likelihood of this taking place increases as the monetary authorities' target inflation rate is reduced. The author notes that they were able to outline this situation in their model. This being the case, the author directs this comment at examining the legitimacy of the model.

The zero lower bound on nominal interest rates constrains the central bank's ability to stimulate the economy during downturns. We use the FRB/US model to quantify the effects of the zero hound on macroeconomic stabilization and to explore how policy can be designed to minimize these effects. During particularly severe contractions, open-market operations alone may be insufficient to restore equilibrium; some other stimulus is needed. Abstracting from such rare events, if policy follows the Taylor rule and targets a zero-inflation rate, there is a significant increase in the variability of output but not inflation. However, a simple modification to the Taylor rule yields a dramatic reduction in the detrimental effects of the zero bound. [ABSTRACT FROM AUTHOR]

This article presents a comment on the paper "Theoretical Analysis Regarding a Zero Lower Bound on Nominal Interest Rates." The author discusses the argument that was laid out in the paper which states that central banks are not hindered in their ability to regulate the economy by low interest rates. The paper holds that central banks can manage the economy by manipulating the exchange rate if they cannot cut an interest rate that is at zero. The author calls this argument into question and attempts to show that this is not an effective measure to stimulate the economy and outlines some of the dangers that would accompany this type of activity.

For the first time in the literature, this paper uses survey-based measures of inflation expectations to examine the relationship between inflation and relative price variability (RPV). Using quarterly consumer price index data for 74 consumption categories in Australia from 1989 to 2014, we estimate the basic linear and piecewise liner models to investigate the impacts of expected and unexpected inflation on RPV. Both headline and core inflation measures are used. The results show a statistically significant and robust positive impact of unexpected inflation on RPV. There is little evidence of asymmetry between the effects of positive and negative inflation shocks. This paper further investigates the specific functional form of the inflation-RPV relationship. While the results suggest a J-shaped nonlinear relationship between inflation and unexpected inflation, there is little evidence of any specific functional form for an expected inflation-RPV relationship. Finally, two structural breaks in the inflation-RPV relationship are identified: 2003Q2 and 2007Q2 for headline inflation and 2000Q2 and 2006Q2 for core inflation. The first two regimes are characterized by a positive and convex association between RPV and unexpected inflation, which disappears in the third regime. The results are qualitatively similar when the model is re-estimated using standard forecast-based inflation expectation measures, suggesting that the traditional approach captures the inflation-RPV relationship reasonably well, at least for Australia. [ABSTRACT FROM AUTHOR]

This paper aims at, on the one hand, analyzing the Brazilian fiscal performance since the implementation of inflation targeting regime (ITR), June 1994, and the usefulness of fiscal rules to reach fiscal discipline in Brazil. On the other hand, it tries to evaluate what would have happened to the Brazilian government deficit if the new fiscal regime, that was implemented in 2016, would have been applied after the implementation of the ITR. Into this direction, we present an empirical analysis to describe three different fiscal rule scenarios, which includes a restriction related to inflation, depending on the preferences of the fiscal authorities: the austere, the symmetric or indifferent or the growth‐promoting environment. The main result of our empirical analysis is that, even in a context of ITR, the use of proper fiscal rule (countercyclical fiscal policy) helps to rationalize fiscal consolidation efforts by promoting a favorable environment for economic growth. [ABSTRACT FROM AUTHOR]

In the last half of the nineteenth century, northern Taiwan experienced a boom in tea exports. This led to a large trade surplus accompanied by large inflows of silver money. The increase in the money supply did not have much effect on rice prices or consumption, but did lower interest rates. The lower interest rates and higher real money balances caused a large increase in real estate prices. This local financial glut lasted more than 20 years. Along the China coast, the banking system allowed businesses to move funds easily in and out of areas, such as northern Taiwan, but once silver reached Taiwanese farmers in the village economy, it did not flow so easily. Studies of early finance that focus on commercial networks generally overlook such problems. [ABSTRACT FROM AUTHOR]

Previous studies of disinflation work with models in which firms use time-dependent strategies, changing nominal prices at intervals of fixed length. These models may be criticized for failing to allow pricing behavior to adjust after a large shift in policy regime. Consequently, this paper develops a model that permits firms to adopt strategies that are partially state dependent, changing nominal prices whenever they depart sufficiently from their target values. The paper uses this model to examine how the welfare costs and benefits of disinflation vary with the initial inflation rate and the speed of disinflation. [ABSTRACT FROM AUTHOR]

The article reports on the long run relationship between nominal interest rates and inflation through the use of the Fisher Equation. The Fisher Equation was introduced by Irving Fisher in 1930 and states that nominal interest is the sum of the constant real rate and the expected decline in the purchasing power of money. Tax effects can impact hypothesized coefficients on expected inflation and set them into the range of 1.3-1.5. Using real interest rate movements can reconcile the problems facing use of the Fisher Equation.

This article focuses on the hyperinflation and stabilization in Taiwan during 1945-1952, that occurred despite the Chinese Nationalist government's attempt to isolate Taiwan by making it an independent currency area separated from the mainland. During the civil war China was able to end hyperinflation on Taiwan by creating bank deposits offering high interest rates. These deposits appear to have played a role in the stabilization, and help explain the behavior of real money balances during the stabilization period. The article explains how in Taiwan, hyperinflation led to a flight from money and a reduction in the base against inflation taxes. To obtain the same level of real resources required a higher tax rate, causing inflation to increase faster than the rate of money creation.

This article examines the asset substitution, money demand and the inflation process in Brazil as the country has become a center of financial innovations in response to high rates of inflation rates, reserve requirements, and low or zero nominal interest rate ceilings on conventional bank accounts. Further Brazilian finance innovations include the growth of relatively unregulated finance companies, the emergence of an equities market, reductions in bank transacting costs through computerization, and the use of bank repurchase agreements as substitutes for conventional deposits.

This article presents an examination of relative-price behavior and an economic environment that is experiencing rapid and variable inflation. The author investigates Argentia's experience under these economic conditions to gain a better understanding of the relationship between the variability of commodity prices and the variability of the aggregate rate of inflation. The author examines sources of variability, links between monetary variables and changes in relative prices and the impact that developments outside the financial sector have on the behavior of prices.

The observed relationship between the standard deviation of forecasts and past forecast errors as found in the Livingston survey suggests the interpretation of the standard deviation as a measure of inflation uncertainty. The mean and the standard deviation for the inflation rate forecast found in the Livingston survey, furthermore, are used as regressors in a reduced-form interest rate equation. The results indicate a large negative effect of such uncertainty on interest rates. The inclusion of the uncertainty measure and commonly omitted lagged values of all variables in our analysis of data leads to more theoretically plausible estimated effects of money growth and expected inflation on interest rates than do standard estimates. [ABSTRACT FROM AUTHOR]

The continuing keynesian-monetarist debate has resulted in increasing attention being focused on the channels of monetary policy. The issue is important for its policy implications and because it divides Keynesians and monetarists; and also because of its implications with respect to the appropriate degree of aggregation in macro econometric models. Support for the single equation approach derives largely from the complexity and uncertainty about the transmission mechanism of monetary policy. The purpose of this paper is to examine commercial bank portfolio changes as one possible link in the money-spending nexus and more specifically to test the hypothesis that changes in commercial bank portfolio composition affect the income velocity of money. Theoretical rationalizations for such a causal relationship have been provided by Warren Smith, William Silber, and Paul Anderson, and Silber and Anderson have since provided impressive empirical evidence in support of such a relationship. With the exception of a brief discussion by Leonall Andersen, criticism of this hypothesis has been negligible. Silber's empirical study is, in terms of policy implication, the most important work in this area and consequently will be the focal point of this paper. The bank portfolio-velocity hypothesis will be briefly discussed, then empirical results will be presented using multiple regression analysis of a distributed lag model. [ABSTRACT FROM AUTHOR]

This article explores two theories, one by H. A. Latané, the other by M. Friedman and A. J. Schwartz, regarding the significance of interest rates as an aspect of income velocity. The author presents an economic model using historic annual U.S. data from 1880-1970 to test both theories. He includes a variable allied with competitive interest payments on money, the inverse of the money supply multiplier, and a monetary aggregate which includes time deposits. He feels his results eliminate the major differences held to exist between the two theories.

This article focuses on the compensatory cyclical bank asset adjustments and the potential effects of such actions upon monetary policy. The author asserts that the argument that banks sell short-term government securities, in this case U.S. Treasury bills, with a minimum of capital loss when interest rates are high, is faulty. The theory holds that such a move increases the velocity of money, which is counter to the purpose of a monetary policy raising interest rates. The author shows that commercial banks actually sell long-term government securities during such periods. The article also discusses liquidity of assets, idle deposits, and bank lending portfolios.

The article presents an econometric analysis of the velocity of money in the United States after World War II through 1957. The analysis considers changes in aggregate velocity by exploring various sector velocities including various industries' corporate velocities, deposit turnover rates, and income velocities. The author's study also considers the federal government's policy towards debt and debt financing, the effect of company size upon the corporate velocity, and corporate ratios of assets to cash.

Building on the idea that the more general and systemic the policy objectives, the more cooperation and scientific support is needed for sound policy design, this paper explores the potential for knowledge sharing and research-based cooperation in the policymaking process in the field of circular economy. A sample of 1244 research publications on circular economy from the Scopus database was collected to assess: i) how the research on CE is distributed among the main disciplines of scientific research, and how much attention each of them pays to the subject; ii) what potential they exhibit for interdisciplinary communication and knowledge sharing; and iii) the potential for developing a transdisciplinary cooperation under a common conceptual policy framework. The analysis shows that policies for circular economy at the micro/meso level (firm or inter-firm initiatives) can rely on a much more adequate knowledge base and potential scientific support than those at the macro level (circular economy as a model of systemic sustainable development). To improve the results on the macro side, a number of disciplines (including social sciences, economics and some behavioural sciences) should be solicited to devote more space to the study of the subject and to develop the basis for mutual understanding with other traditionally more involved research areas. [ABSTRACT FROM AUTHOR]

This paper performs a long-run time series analysis of the behaviour of the income velocity of money in Portugal between 1891 and 1998 by assessing the importance of both macroeconomic and institutional factors and looking for particularities in the Portuguese case. We estimate two cointegration vectors for the income velocity of money, macroeconomic variables and institutional variables. It is apparent that one of these vectors reflects the relationship between income velocity and macroeconomic variables, while the other reflects the relationship between income velocity and institutional variables. Moreover, a regression analysis reveals that the usual U-shaped pattern is displayed with a relatively late inflection point located around 1970, which is consistent with the Spanish case. It is further noted that this is a feature of countries with a late economic and institutional development process. [ABSTRACT FROM AUTHOR]

It is widely believed that globalization has changed inflation process. The global resource capacity reduces responsiveness of inflation to domestic activity and increases responsiveness of inflation to global resource capacity. This global slack hypothesis is tested using different theoretical specifications, which also relate domestic output elasticity and foreign output elasticity to the degree of trade openness of an individual economy. The results reject this hypothesis. The global resource capacity does not drive domestic inflation. The impact of globalization has not increased in the inflation process, and the results yield important policy implications for monetary policy formulation. The global resource capacity does not affect ability of the central banks to stabilize inflation, real economic activity and also respond to the volatility of output growth. [ABSTRACT FROM AUTHOR]

Low inflation likely reflects factors whose influence should fade over time. But many uncertainties attend this assessment, and downward pressures on inflation could prove to be unexpectedly persistent. My colleagues and I may have misjudged the strength of the labor market, the degree to which longer-run inflation expectations are consistent with our inflation objective, or even the fundamental forces driving inflation. In interpreting incoming data, we will need to stay alert to these possibilities and, in light of incoming information, adjust our views about inflation, the overall economy, and the stance of monetary policy best suited to promoting maximum employment and price stability. How should policy be formulated in the face of such significant uncertainties? In my view, it strengthens the case for a gradual pace of adjustment. But we should also be wary of moving too gradually. It would be imprudent to keep monetary policy on hold until inflation is back to 2%. [ABSTRACT FROM AUTHOR]

In this study, we attempt to identify the asset which has the best hedging characteristics against inflation. We study stock, bond, commodity, real estate and oil indexes. We also study these indexes tracking exchange traded funds (ETFX) to determine the most beneficial tradable asset in addition to the more theoretical index for inflation hedging. We find that, in our sample, oil is the best hedge against inflation, even though three in total are a good hedge-oil, gold and corn-with corn and oil being complete hedges, while gold is a partial hedge. Two assets have conflicting results depending on whether we examine the index or the ETF: the real estate index is a hedge, whereas real estate ETF is the opposite of a hedge. Similarly, the bond index is not related to inflation, whereas bond ETF is the opposite of a hedge. We find that stocks, soy and beef are not hedges against inflation. [ABSTRACT FROM AUTHOR]

Up until the 1980s, studies on corruption were dominated by disciplines of public administration and sociology. In the following years, however, economists have also provided a good amount of research on this issue. According to Transparency International Agency, corruption, which has a negative impact on most macroeconomic indicators, is "the abuse of entrusted power for private gain". Even though the disruption of corruption causing weak growth and investment rates has long been examined, there is little evidence regarding its impact on inflation. In this study, the nexus between corruption and inflation was investigated for 20 countries over the period 1995-2015. Estimation results indicated that high corruption increased inflation rates, and that there was a unidirectional causal relationship from corruption to inflation for ten countries in the sample. [ABSTRACT FROM AUTHOR]

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This study examines the causal relationship between the actual and expected inflation in the U.S., using the bootstrap Granger full-sample causality test and sub-sample rolling-window estimation test to illustrate the self-fulfilment of inflation expectations. The full-sample result indicates that there is a bidirectional causality between the actual and expected inflation, showing the possibility of self-fulfilment of inflation expectations which illustrates that inflation is driven by inflation expectation. However, considering structural changes in two series, we find that the short-run causal nexus between the actual and expected inflation using full-sample data are fraudulent. By adopting a time-varying rolling-window approach to revisiting the dynamic causal relationships, this article identifies that the actual inflation has both positive and negative impacts on the expected inflation in distinct sub-periods. Nevertheless, inflation expectation exerts only negative effects on the actual inflation. The results point out that the self-fulfilment of inflation expectations does not exist. Given the bidirectional nexus between the actual and expected inflation, keeping a low and stable inflation is critical to price stability and anchoring of inflation expectation. [ABSTRACT FROM AUTHOR]

The growth rate of "nonprimary gross domestic product (GDP)" (Perú's urban economy) dropped to 3.6 percent in 2014 and to 2.4 percent in 2015, far below the annual average of 7.3 percent recorded over the previous decade; moreover, an equally low growth rate of 2.8 percent per year is projected in 2016. In the macroeconomic history of Peru, the times of plenty--that is, the more or less prolonged booms--are also times of high prices of the commodities that the country exports; meanwhile, the lean times--that is, the more or less intense recessions in which economic activity slows down--are times of low commodity prices. This article describes the negative external shock undergone by the Peruvian economy and its recessionary and inflationary effects over 2014-15, analyzes the fiscal and monetary policies applied in response to the external shock, and outlines the macroeconomic challenges faced by the new government of Pedro Pablo Kuczynski. [ABSTRACT FROM AUTHOR]

The paper presents a neo-structuralist econometric analysis of the monthly inflation rates. The model breaks down the CPI into different components based on their price-formation mechanisms. The basic breakdown defines three components: PFLEX (fruits and vegetables, 3.6% of the basket), PREGUL (prices regulated by the government, 20.1% of the basket) and PFIX (the rest of goods and services, 76.3% of the basket). PFIX is the focus of the econometric analysis while PFLEX and PREGUL are considered exogenous. The explanatory variables are the monthly rates of: the price of bovine cattle at the domestic market, the international soy price, the price by ton of imported intermediate goods, the nominal exchange rate, the average wage of workers that are registered in Social Security and the productivity, measured by the GDP by employed worker. There was an informal indexation mechanism in the labor market. Average monthly wages rose at annual rates that were almost always higher than the sum of past annual inflation plus the annual increase in productivity. The over-indexation of the unit labor cost was the main inflationary factor in the period. The inertial component, represented in the model by the previous monthly rate, determines 60% of the current rate. [ABSTRACT FROM AUTHOR]

Quarterly data for Thailand are used in this article for the period 1965q3–2013q4 to investigate both the relationship between inflation and inflation volatility, and the impact of inflation volatility on economic growth. Inflation volatility is estimated by deploying the generalized autoregressive conditional heteroscedastic (GARCH) technique. A Granger causality test is then conducted to examine the causality between inflation and inflation volatility. The empirical results obtained are consistent with a number of theoretical propositions. First, the results are consistent with the Friedman–Ball proposition, which states that a rise in inflation raises inflation volatility. Second, there is evidence supporting the Holland proposition that inflation volatility lowers the rate of inflation. This is consistent with the view that central banks attempt to stabilize inflation with the rise in inflation volatility. Third, empirical results obtained by asymmetric GARCH models suggest that inflation shocks have an asymmetric impact on inflation volatility (i.e. a positive inflation shock has a larger impact on inflation volatility – as measured by the logarithm of the conditional variance of inflation – than a negative inflation shock). Fourth, inflation volatility has an adverse impact on economic growth. Finally, given the fixed/pegged or managed float exchange rate system, US inflation has been found to have a positive impact on inflation and its volatility in Thailand. This article discusses the implications of empirical findings on the design and enactment of monetary policy for price stability in Thailand. [ABSTRACT FROM PUBLISHER]

In Anglo-Saxon societies, homeowners expect to create synergies between the owned house seen as a space of shelter, a place of home, a store of wealth and increasingly, an investment vehicle (and an object of debt). Drawing on interviews with owner-occupiers and on historic house value and mortgage data in Great Britain, we examine the way in which homes’ meanings are negotiated through the subjective calculation of the financial costs and gains of homebuying. We explore homebuyers’ miscalculation of gains, their disregard of inflation and more generally, the inconspicuousness of debt in relation to gains within their accounts, which we term ‘debt amnesia’. We show that the phenomenon of debt amnesia is socially constructed by congruent socio-linguistic, cultural, institutional and ideological devices besides being supported by historic growth in house values. Informed by the ideas of ‘tacit knowledge’ and ‘metaphoric understanding’, we reflect on how the occurrence of the unspoken and the partiality of metaphor reinforce the internalisation of homeownership. [ABSTRACT FROM AUTHOR]

In this paper, a novel architecture of Vedic multiplier with ‘Urdhava-tiryakbhyam’ methodology for 16 bit multiplier and multiplicand is proposed with the use of compressor adders. Equations for each bit of 32 bit resultant are calculated distinctly and compressor adders are used to implement these equations. They are chosen as they decrease vertical critical delay in comparison to the conventional architectures of compressors implemented using half and full adders only and so make the multiplier fast. The designs are coded in VHDL (Very High-speed Integrated Circuits Hardware Description Language) and synthesized with Xilinx ISE 13.1 using Spartan 3e series of FPGA (Field Programmable Gate Array). The combinational delay calculated for proposed 16 × 16 bit multiplier is 32 ns. Further speed comparisons of compressor adders with traditional ones and proposed multiplier with popular methods for multiplication are shown. Results clearly indicate the better speed performance of our proposed Vedic multiplier. [ABSTRACT FROM AUTHOR]

Retail businesses must constantly evolve with new strategies introduced in order to meet and even to exceed customers expectations. This effort can be enhanced by incorporating inspection processes in business routines that will maximize the effectiveness of attempts to sell quality products. Further, permissible delay in payments has certainly been a prominent strategy in today's business transactions, helping in gaining the financial advantage for both the retailers and the suppliers. Moreover, in order to recognize the proper and exact timing of cash flows associated with an inventory system, inflation and time value of money should also be incorporated. Considering all the above described real life aspects and prob- lems, a model is formulated here to study the combined effect of imperfect quality items, trade credit, shortages, inflation and time value of money on an inventory system. An analytical method is em- ployed to jointly optimize the order quantity and the shortages. To study the behavior and application of the proposed model, a numerical example, including sensitivity analysis, has been analyzed. The potential applications, improving the decision making process of the model introduced can be found in industries like textile, footwear, plastics, electronics, etc. [ABSTRACT FROM AUTHOR]

Thomas Middleton and Thomas Dekker's The Roaring Girl features a surprising number of money transactions considering the historical and economic context of the period where hard currency was scarce and trade based on pervasive debt and credit networks. The circulation of money thus emerges as one of the themes of the play, with the protagonist Moll Frith determining the failure or success and, by extension, the acceptability of many of the financial transactions. Through Moll's character and actions the play engages in a critique of self-interested money transactions that may damage or even destroy others and their social standing. This critique is further sustained by parallel episodes on different plot levels and characters that contrast with or mirror Moll and her actions. The occasionally cross-dressed figure of Moll has been analysed as a subversive proto-feminist character, as a projection of cultural and economic fears and fantasies or as an ultimately conservative figure who is reintegrated into patriarchal society. My own reading proposes that Moll stands for an idealistic society and economy but that the ending of the play leaves it open whether Moll is finally assimilated into a society where "simple," disinterested, service is superseded by self-interested financial transactions. [ABSTRACT FROM AUTHOR]

The essential insight advanced in this paper is that the claim that inflation can impair growth makes most sense in the context of a monetary production economy, wherein a role for money in the determination of real activity is posited from the very start. We construct a model of inflation and growth that distinguishes between the properties of various qualitatively different inflation regimes. It is then shown how some of these regimes, by undermining confidence in various nominal contracts that are central to the process of accumulation in a monetary production economy, can adversely affect growth. [ABSTRACT FROM PUBLISHER]

The standard approach adopted in the literature exploits data on money demand to extrapolate the dynamics of the unobserved economic activity. In this paper, we explore instead the long-run effects of shadow economy measures-obtained independently from money demand functions-on the velocity of circulation of money. Empirical evidence from a panel covering 43 countries over the period 1981-2005 shows that variations in the relative size of the unrecorded sector have a negative and significant effect on the velocity of circulation of money. This is because, ceteris paribus, the higher the share of the shadow economy, the higher the demand for currency and therefore the lower the velocity of circulation of money. The negative relation between underground economic activity and velocity of circulation of money is robust to the use of different shadow economy estimates, to a sub-sample analysis and to the inclusion of a time trend. [ABSTRACT FROM AUTHOR]

The money multiplier approach asserts that banks are unique in that they implement a creation of money, while the finance approach regards banking institutions as financial intermediaries among others. In retrospect, Cantillon's Essai stands between these two extreme approaches. It both challenges the money multiplier approach and grants to banks a significant monetary role. The aim of the paper is to clarify Cantillon's theoretical propositions on bank issuing of debts convertible on demand into money at face value and to explore further the proposition according to which banks contribute to accelerating the circulation of money. [ABSTRACT FROM AUTHOR]

We develop a small open economy model and compare alternative fiscal-monetary policy mixes using data for China. We show that the trade-offs faced by policy makers involve not only the stabilization of output, inflation, and real exchange rates, but also government debt stability. The source of shocks has important implications for the trade-offs. In the face of external shocks to interest rates or inflation, a passive fiscal and active monetary policy mix performs well in stabilizing government liabilities, inflation, and real exchange rates but generates higher output volatility. An active fiscal and active monetary policy mix is much more stabilizing in response to internal shocks to government expenditures or sector-specific productivity. [ABSTRACT FROM AUTHOR]

We discuss theoretical foundations of inflation dynamics and which indicators can measure the influencing factor of China’s inflation rates and select an indicator capable of providing additional information. We next select further from the indicators, examining previous recursive forecasts based on the special historical background of the preparatory projects for the Twelfth Five-Year Plan and the economic structure model. Then forecasting effects of the thirty-six integrated models, which construct indicators of various factors subjected to the previous forecast inspection, are researched. Finally, some conclusions, such as which integrated models can be used to forecast China’s inflation rates, are determined. [ABSTRACT FROM AUTHOR]

We study fiscal and monetary policy in a monetary union with the potential for rollover crises in sovereign debt markets. Member-country fiscal authorities lack commitment to repay their debt and choose fiscal policy independently. A common monetary authority chooses inflation for the union, also without commitment. We first describe the existence of a fiscal externality that arises in the presence of limited commitment and leads countries to over-borrow; this externality rationalizes the imposition of debt ceilings in a monetary union. We then investigate the impact of the composition of debt in a monetary union, that is the fraction of high-debt versus low-debt members, on the occurrence of self-fulfilling debt crises. We demonstrate that a high-debt country may be less vulnerable to crises and have higher welfare when it belongs to a union with an intermediate mix of high- and low-debt members, than one where all other members are low-debt. This contrasts with the conventional wisdom that all countries should prefer a union with low-debt members, as such a union can credibly deliver low inflation. These findings shed new light on the criteria for an optimal currency area in the presence of rollover crises. [ABSTRACT FROM AUTHOR]