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5741. Balancing Positive and Negative Integration: The Regulatory Options for Europe

Author:
Fritz W. Scharpf
Publication Date:
11-1997
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
During the golden years from the 1950s to the mid-1970s, the industrial nations of Western Europe had the chance to develop specifically national versions of the capitalist welfare state - and their choices were in fact remarkably different (Esping-Andersen 1990). In spite of the considerable differences between the "Social-Democratic", "Corporatist" or "Liberal" versions, however, all were remarkably successful in maintaining full employment and promoting economic growth, while also controlling, in different ways and to different degrees, the destructive tendencies of unfettered capitalism in the interest of specific social, cultural, and/or ecological values (Scharpf 1991a; Merkel 1993). It was not fully realized at the time, however, how much the success of market-correcting policies did in fact depend on the capacity of the territorial state to control its economic boundaries. Once this capacity is lost, countries are forced into a competition for locational advantage which has all the characteristics of a Prisoner's Dilemma game (Sinn 1994). It reduces the freedom of national governments and unions to raise the regulatory and wage costs of national firms above the level prevailing in competing locations. Moreover, and if nothing else changes, the "competition of regulatory systems" that is generally welcomed by neoliberal economists (Streit/Mussler 1995) and politicians may well turn into a downward spiral of competitive deregulation and tax cuts in which all competing countries will find themselves reduced to a level of protection that is in fact lower than that preferred by any of them.
Topic:
Economics, Government, International Organization, and International Political Economy
Political Geography:
Europe

5742. Nigeria: Country Profile

Publication Date:
11-1996
Content Type:
Working Paper
Institution:
Africa Policy Information Center
Abstract:
Nigeria, Africa's most populous nation, was a pioneer in the movement for African independence. In past centuries, its territory was home to a series of powerful and technically-advanced societies, renowned for their artistic, commercial, and political achievements.
Topic:
Democratization, Economics, Ethnic Conflict, Government, Nationalism, and Politics
Political Geography:
Africa and Nigeria

5743. The Syndrome of the Ever-Higher Yen, 1971-95: American Mercantile Pressure on Japanese Monetary Policy

Author:
Ronald McKinnon, Kazuko Shirono, and Kenichi Ohno
Publication Date:
12-1996
Content Type:
Working Paper
Institution:
Walter H. Shorenstein Asia-Pacific Research Center
Abstract:
From 1971 through mid-1995, the yen continually appreciated against the U.S. dollar because the Japanese and American governments were caught in a mutual policy trap. Repeated threats of a trade war by the United States caused the yen to ratchet up in 1971-73, 1977-78, 1985-87, and 1993 to mid-1995. While temporarily ameliorating commercial tensions, these great appreciations imposed relative deflation on Japan without correcting the trade imbalance between the two countries. Although resisting sharp yen appreciations in the short run, the Bank of Japan validated this syndrome of the ever-higher yen by following a monetary policy that was deflationary relative to that established by the U.S. Federal Reserve System. The appreciating yen was a forcing variable in determining the Japanese price level. After 1985, this resulted in great macroeconomic instability in Japan--including two endaka fukyos (high-yen-induced recessions).
Topic:
Economics, International Political Economy, and International Trade and Finance
Political Geography:
United States, Japan, America, Israel, and East Asia

5744. A United States Policy for the Changing Realities of East Asia

Author:
Donald Emmerson, Henry Rowen, Michel Oksenberg, Daniel Okimoto, James Raphael, Thomas Rohlen, and Michael H. Armacost
Publication Date:
01-1996
Content Type:
Working Paper
Institution:
Walter H. Shorenstein Asia-Pacific Research Center
Abstract:
Since the end of the Cold War, the power and prestige of the United States in East Asia have suffered a worrisome degree of erosion. The erosion is, in part, the by-product of long-run secular trends, such as structural shifts in the balance of power caused by the pacesetting growth of East Asian economies. But the decline has been aggravated by shortcomings in U.S. policy toward East Asia, particularly the lack of a coherent strategy and a clear-cut set of policy priorities for the post-Cold War environment. If these shortcomings are not corrected, the United States runs the risk of being marginalized in East Asia--precisely at a time when our stakes in the region are as essential as those in any area of the world. What is needed, above all, is a sound, consistent, and publicly articulated strategy, one which holds forth the prospect of serving as the basis for a sustainable, nonpartisan domestic consensus. The elements of an emerging national consensus can be identified as follows:
Topic:
International Relations, Security, Foreign Policy, and Economics
Political Geography:
United States, China, Israel, East Asia, and Asia

5745. The Coming Global Pension Crisis: The Aging of the World's Population and Its Implications for Capital Flows

Author:
Laura D'Andrea Tyson, Haruhiko Kuroda, Dr. Norbert Walter, Robert C. Pozen, Thomas W. Jones, Alice M. Rivlin, Marshall Carter, Olivia S. Mitchell, Russell J. Cheetham, Yves Guerard, Jan Svejnar, David Hale, Martin S. Feldstein, and Robert D. Hormats
Publication Date:
11-1996
Content Type:
Working Paper
Institution:
Council on Foreign Relations
Abstract:
Social Security has been described as the crown jewel of American federal government programs. It is widely recognized to be the major reason why the poverty rate among the elderly in the United States has fallen in half since 1959 and is lower today than the poverty rate for any other population group as a whole. Fifteen million older Americans are kept out of poverty by Social Security.
Topic:
Economics, Government, and International Political Economy
Political Geography:
United States and America

5746. Theoretical Confidence Level Problems with Confidence Intervals for the Spectrum of a Time Series

Author:
Jon Faust
Publication Date:
12-1996
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
Textbook approaches to forming asymptotically justified confidence intervals for the spectrum under very general assumptions were developed by the mid-1970s. This paper shows that under the textbook assumptions, the true confidence level for these intervals does not converge to the asymptotic level, and instead is fixed at zero in all sample sizes. The paper explores necessary conditions for solving this problem, most notably showing that under weak conditions, forming valid confidence intervals requires that one limit consideration to a finite-dimensional time series model.
Topic:
Conflict Resolution, Economics, and Education

5747. Money, Politics, and the Post-War Business Cycle

Author:
Jon Faust and John S. Irons
Publication Date:
11-1996
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
While macroeconometricians continue to dispute the size, timing, and even the existence of effects of monetary policy, political economists often find large effects of political variables and often attribute the effects to manipulation of the Fed. Since the political econometricians often use smaller information sets and less elaborate approaches to identification than do macroeconometricians, their striking results could be the result of simultaneity and omitted variable biases. Alternatively, political whims may provide the instrument for exogenous policy changes that has been the Grail of the policy identification literature. In this paper, we lay out and apply a framework for distinguishing these possibilities. We find almost no support for the hypothesis that political effects on the macroeconomy operate through monetary policy and only weak evidence that political effects are significant at all.
Topic:
Economics, Government, Political Economy, and Politics

5748. The Accumulation of Human Capital: Alternative Methods and Why They Matter

Author:
Ann L. Owen and Murat F. Iyigun
Publication Date:
05-1996
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
We show how the ability o accumulate human capital through formal education and through a learning-by-doing process that occurs on the job affects the dynamic behavior of the human capital stock under a liquidity constrained and a non-constrained case. When there are alternatives to formal schooling in the accumulation of human capital, investing resources in increasing school enrollment rates in low-income countries may not be the most efficient means of increasing the human capital stock. In addition, removal of the liquidity constraints may not be sufficient to escape a development trap.
Topic:
International Relations, Economics, Education, and International Trade and Finance

5749. Hazards in Implementing a Monetary Conditions Index

Author:
Neil R. Ericsson, Kari H. Eika, and Ragnar Nymoen
Publication Date:
10-1996
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
Some recent studies have suggested constructing a Monetary Conditions Index (or MCI) to serve as an indicator of monetary policy stance. The central banks of Canada, Sweden, and Norway all construct an MCI and (to varying degrees) use it in conducting monetary policy. Empirically, an MCI is calculated as the weighted sum of changes in a short-term interest rate and the exchange rate relative to values in a baseline year. The weights aim to reflect these variables' effects on longer-term focuses of policy — economic activity and inflation. This paper derives analytical and empirical properties of MCIs in an attempt to ascertain their usefulness in monetary policy.
Topic:
Economics and International Trade and Finance
Political Geography:
Europe and North America

5750. Regime Switching in the Dynamic Relationship between the Federal Funds Rate and Innovations in Nonborrowed Reserves

Author:
Chan Huh
Publication Date:
01-1996
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
This paper examines the dynamic relationship between changes in the finds rate and nonborrowed reserves within a reduced form framework that allows the relationship to have WO distinct patterns over time. A regime switching model a la Hamilton (1989) is estimated. On average, CPI inflation has been significantly higher in the regime and volatile changes in funds rate. Innovations in money growth are characterized by large associated with a strong anticipated inflation effect in this high inflation regime, and a moderate liquidity effect in the low inflation regime. Furthermore, an identical money innovation generates a much bigger increase in the interest rate during a transition period from the low to high inflation regime than during a steady high inflation period. This accords well with economic intuition since the transition period is when the anticipated inflation effect initially gets incorporated into the interest rate. The converse also holds. That is, the liquidity effect becomes stronger when the economy leaves a high inflation regime period and enters a low inflation regime period.
Topic:
International Relations, Development, Economics, and International Trade and Finance