Growth of positive words and lower bounds of the growth rate for Thompson's group (F)p

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Interest rate determination in the interbank market

The purpose of this paper is to study the determinants of equilibrium in the market for daily funds. We use the EONIA panel database which includes daily information on the lending rates applied by contributing commercial banks. The data clearly shows an increase in both the time series volatility and the cross section dispersion of rates towards the end of the reserve maintenance period. These increases are highly correlated. With respect to quantities, we find that the volume of trade as well as the use of the standing facilities are also larger at the end of the maintenance period. Our theoretical model shows how the operational framework of monetary policy causes a reduction in the elasticity of the supply of funds by banks throughout the reserve maintenance period. This reduction in the elasticity together with market segmentation and heterogeneity are able to generate distributions for the interest rates and quantities traded with the same properties as in the data.

Marx's analysis of the falling rate of profit on the first version of volume III of capital

The paper provides a description and analysis of the Hodgskin section of Theories of Surplus Value and the general law section of the first version of Volume III of Capital. It then considers Part III of Volume III, the evolution of Marx's thought and various interpretations of his theory in the light of this analysis. It is suggested that Marx thought that the rate of profit must fall and even in the 1870s hoped to be able to provide a demonstration of this. However the main conclusions are: 1. Marx's major attempt to show that the rate of profit must fall occurred in the general law section. 2. Part III does not contain a demonstration that the rate of profit must fall. 3. Marx was never able to demonstrate that the rate of profit must fall and he was aware of this.

How tight should one's hands be tied? Fear of floating and credibility of exchange rate regimes

This paper analyzes the linkages between the credibility of a target zone regime, the volatility of the exchange rate, and the width of the band where the exchange rate is allowed to fluctuate. These three concepts should be related since the band width induces a trade-off between credibility and volatility. Narrower bands should give less scope for the exchange rate to fluctuate but may make agents perceive a larger probability of realignment which by itself should increase the volatility of the exchange rate. We build a model where this trade-off is made explicit. The model is used to understand the reduction in volatility experienced by most EMS countries after their target zones were widened on August 1993. As a natural extension, the model also rationalizes the existence of non-official, implicit target zones (or fear of floating), suggested by some authors.

Current Account imbalances, thriftiness and the real exchange rate in a growing economy

This paper analyses the theoretical relevance of the dynamical aspects of growth on the discussion about the observed positive correlation between per capita real income and real exchange rates. With this purpose, we develop a simple exogenous growth model where the internal, external and intertemporal equilibrium conditions of a typical macroeconomic model are imposed; this last one through the inclusion of a balanced growth path for the foreign assets accumulation. The main result under this consideration is that the relationship defended by the Balassa-Samuelson hypothesis is no more so straightforward. In our particular approach, the mentioned bilateral relationship depends on a parameter measuring thriftiness in the economy. Therefore, the probability of ending up with a positive relationship between growth and real exchange rates -as the classical economic theory predicts- will be higher when the economy is able to maintain a minimum saving ratio. Moreover, given that our model considers a simple Keynesian consumption function, some explosive paths can also be possible.

A Descriptive and analytic look at Marx's own explanations of the falling rate of profit (second version)

This paper examines, both descriptively and analytically, Marx's arguments for the falling rate of profit from the Hodgskin section of Theories of Surplus Value, The General Law section of the recently published Volume 33 of the Collected Works and Chapter 3 of Volume III of Capital. The conclusions are as follows: First, Marx realised that his main attempt to give an intrinsic explanation of the falling rate of profit, which occurred in the General Law section, had failed; but he still hoped that he would be able to demonstrate it in the future. Second, the Hodgskin and General Law sections contain a number of subsidiary explanations, mostly related to resource scarcity, some of which are correct. Third, Part III of volume III does not contain a demonstration of the falling rate of profit, but a description of the role of the falling rate of profit in capitalist development. Forth, it also contains suppressed references to resource scarcity. And finally, in Chapter 3 of Volume III, Marx says that it is resource scarcity that causes the fall in the rate of profit described in Part III of the same volume. The key to all these conclusions in the careful analysis of the General Law section.

A foundation model for marxian breakdown theories based on a new falling rate of profit mechanism (Long version)

The paper presents a foundation model for Marxian theories of the breakdown of capitalism based on a new falling rate of profit mechanism. All of these theories are based on one or more of "the historical tendencies": a rising capital-wage bill ratio, a rising capitalist share and a falling rate of profit. The model is a foundation in the sense that it generates these tendencies in the context of a model with a constant subsistence wage. The newly discovered generating mechanism is based on neo-classical reasoning for a model with land. It is non-Ricardian in that land augmenting technical progress can be unboundedly rapid. Finally, since the model has no steady state, it is necessary to use a new technique, Chaplygin's method, to prove the result.

On the choice of an exchange rate regime: target zones revisited

From the classical gold standard up to the current ERM2 arrangement of the European Union, target zones have been a widely used exchange regime in contemporary history. This paper presents a benchmark model that rationalizes the choice of target zones over the rest of regimes: the fixed rate, the free float and the managed float. It is shown that the monetary authority may gain efficiency by reducing volatility of both the exchange rate and the interest rate at the same time. Furthermore, the model is consistent with some known stylized facts in the empirical literature that previous models were not able to produce, namely, the positive relation between the exchange rate and the interest rate differential, the degree of non-linearity of the function linking the exchage rate to fundamentals and the shape of the exchange rate stochastic distribution.

A foundation model for marxian breakdown theories based on a new falling rate of profit mechanism.

The paper presents a foundation model for Marxian theories of the breakdown of capitalism based on a new falling rate of profit mechanism. All of these theories are based on one or more of ?the historical tendencies?: a rising capital-wage bill ratio, a rising capitalist share and a falling rate of profit. The model is a foundation in the sense that it generates these tendencies in the context of a model with a constant subsistence wage. The newly discovered generating mechanism is based on neo-classical reasoning for a model with land. It is non-Ricardian in that land augmenting technical progress can be unboundedly rapid. Finally, since the model has no steady state, it is necessary to use a new technique, Chaplygin?s method, to prove the result.

A proposal for a new specification for a conditionally heteroskedastic variance model: the Quadratic Moving-Average Conditional Heteroskedasticity and an application to the D. Mark-U.S. dollar Exchange Rate

Ever since the appearance of the ARCH model [Engle(1982a)], an impressive array of variance specifications belonging to the same class of models has emerged [i.e. Bollerslev's (1986) GARCH; Nelson's (1990) EGARCH]. This recent domain has achieved very successful developments. Nevertheless, several empirical studies seem to show that the performance of such models is not always appropriate [Boulier(1992)]. In this paper we propose a new specification: the Quadratic Moving Average Conditional heteroskedasticity model. Its statistical properties, such as the kurtosis and the symmetry, as well as two estimators (Method of Moments and Maximum Likelihood) are studied. Two statistical tests are presented, the first one tests for homoskedasticity and the second one, discriminates between ARCH and QMACH specification. A Monte Carlo study is presented in order to illustrate some of the theoretical results. An empirical study is undertaken for the DM-US exchange rate.

A descriptive and analytic look at Marxs own explanations for the falling rate of profit

Marxs conclusions about the falling rate of profit have been analysed exhaustively. Usually this has been done by building models which broadly conform to Marxs views and then showing that his conclusions are either correct or, more frequently, that they can not be sustained. By contrast, this paper examines, both descriptively and analytically, Marxs arguments from the Hodgskin section of Theories of Surplus Value, the General Law section of the recently published Volume 33 of the Collected Works and Chapter 3 of Volume III of Capital. It also gives a new interpretation of Part III of this last work. The main conclusions are first, that Marx had an intrinsic explanation of the falling rate of profit but was unable to give it a satisfactory demonstration and second, that he had a number of subsidiary explanations of which the most important was resource scarcity. The paper closes with an assessment of the pedigree of various currents of Marxian thought on this issue.

A descriptive and analytic look at Marxs own explanations for the falling rate of profit (Long Version)

Marxs conclusions about the falling rate of profit have been analysed exhaustively. Usually this has been done by building models which broadly conform to Marxs views and then showing that his conclusions are either correct or, more frequently, that they can not be sustained. By contrast, this paper examines, both descriptively and analytically, Marxs arguments from the Hodgskin section of Theories of Surplus Value, the General Law section of the recently published Volume 33 of the Collected Works and Chapter 3 of Volume III of Capital. It also gives a new interpretation of Part III of this last work. The main conclusions are first, that Marx had an intrinsic explanation of the falling rate of profit but was unable to give it a satisfactory demonstration and second, that he had a number of subsidiary explanations of which the most important was resource scarcity. The paper closes with an assessment of the pedigree of various currents of Marxian thought on this issue.

Land, technical progress and the falling rate of profit

The paper sets out a one sector growth model with a neoclassical production function in land and a capital-labour aggregate. Capital accumulates through capitalist saving, the labour supply is infinitely elastic at a subsistence wage and all factors may experience factor augmenting technical progress. The main result is that, if the elasticity of substitution between land and the capital-labour aggregate is less than one and if the rate of caital augmenting technical progress is strictly positive, then the rate of profit will fall to zero. The surprise is that this result holds regardless of the rate of land augmenting technical progress; that is, no amount of technical advance in agriculture can stop the fall in the rate of profit. The paper also discusses the relation of this result to the classical and Marxist literature and sets out the path of the relative price of land.

The short and long-run determinants of the real exchange rate in Mexico

This paper explores the real exchange rate behavior in Mexico from 1960 until 2005. Since the empirical analysis reveals that the real exchange rate is not mean reverting, we propose that economic fundamental variables affect its evolution in the long-run. Therefore, based on equilibrium exchange rate paradigms, we propose a simple model of real exchange rate determination which includes the relative labor productivity, the real interest rates and the net foreign assets over a long period of time. Our analysis also considers the dynamic adjustment in response to shocks through impulse response functions derived from the multivariate VAR model.

On the growth rate of minor-closed classes of graphs

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