The Making of Optimal and Consistent Policy: An Analytical Framework for Monetary Models

This paper shows that optimal policy and consistent policy outcomes require the use of control-theory and game-theory solution techniques. While optimal policy and consistent policy often produce different outcomes even in a one-period model, we analyze consistent policy and its outcome in a simple model, finding that the cause of the inconsistency with optimal policy traces to inconsistent targets in the social loss function. As a result, the central bank should adopt a loss function that differs from the social loss function. Carefully designing the central bank s loss function with consistent targets can harmonize optimal and consistent policy. This desirable result emerges from two observations. First, the social loss function reflects a normative process that does not necessarily prove consistent with the structure of the microeconomy. Thus, the social loss function cannot serve as a direct loss function for the central bank. Second, an optimal loss function for the central bank must depend on the structure of that microeconomy. In addition, this paper shows that control theory provides a benchmark for institution design in a game-theoretical framework.

Hegemony Without Stability: The fiscal and political vulnerabilities of monetary union. ACES Cases No. 2011.2

The crisis has forced the Euro area to establish an emergency fund that supports member states experiencing a sovereign debt crisis. The difficulties of coming up with such a fund for Greece and other Euro area members stands in marked contrast to the balance of payments support that non-Euro members like Hungary received, swiftly and quietly. In order to solve this puzzle, we first establish the difference between EU interventions and IMF programs and, second, trace the evolution of crisis management with France and Germany in the lead. The lens of hegemonic stability theory suggests that the Franco-German leadership is too weak to provide stability and the extensive use of conditionality is one symptom of this weakness. Providing incentives for cooperation "after hegemony" (Keohane) is the unresolved issues troubling the monetary union. Its dominant powers must acknowledge that markets perceive monetary union to be already politically more integrated than its lack of fiscal integration suggests.

Creating Stability: National Preferences and the Origins of European Monetary System. CES Germany & Europe Working Papers, No. 00.9, December 2000

This essay compares the preferences of France, Italy, and Britain on the creation of the European Monetary System in 1978-1979, especially the Exchange Rate Mechanism, which stabilised nominal exchange rates. My claim is that the different conclusions reached by the governments (France and Italy in, Britain out) cannot be explained by economic circumstances or by interests, and I elaborate an intervening institutional variable which helps explain preferences. Deducing from spatial theory that where decisionmakers `sit' on the left-right spectrum matters to their position on the EMS, I argue that domestic constitutional power-. sharing mechanisms privilege certain actors over others in a predictable and consistent way. Where centrists were in power, the government's decision was to join. Where left or right extremists were privileged, the government's decision was negative. The article measures the centrism of the governments in place at the time, and also reviews the positions taken by the national political parties in and out of government. It is intended to contribute to the growing comparativist literature on the European Union, and to the burgeoning literature on EU-member-state relations.

The effect of deficits on prices of financial assets : theory and evidence /

"March 1984."

Essays on Fiscal Policy, Monetary Policy and Currency Unions: Exploring the Role of Informality and Labor Mobility

Thesis (Ph.D.)--University of Washington, 2016-06

Monetary variability and monetary variables in the Franc zone

Failure to detect or account for structural changes in economic modelling can lead to misleading policy inferences, which can be perilous, especially for the more fragile economies of developing countries. Using three potential monetary policy instruments (Money Base, M0, and Reserve Money) for 13 member-states of the CFA Franc zone over the period 1989:11-2002:09, we investigate the magnitude of information extracted by employing data-driven techniques when analyzing breaks in time-series, rather than the simplifying practice of imposing policy implementation dates as break dates. The paper also tests Granger's (1980) aggregation theory and highlights some policy implications of the results.

Magyar alkalmazkodás az Európai Unió monetáris együttműködéséhez - tanulságok (Hungarian adaption to the monetary cooperation)

A cikk röviden összefoglalja az optimális valutaövezetek elméletének fejlődési állomásait, miközben felvet néhány kérdést a 2008-ban kezdődött válsággal kapcsolatban. Ezt követően áttekinti az elmélet és a válság által felvetett problémákra a gazdasági és monetáris unió által adott válaszokat. Végül az elmélet, az európai szabályozás aktuális állapota és a hazai tapasztalatok, lehetőségek tükrében megvizsgálja, hogy a jelenlegi helyzetben Magyarországnak milyen érdekei és ellenérdekei fűződhetnek az euró bevezetéséhez. Az írás kísérletet tesz arra, hogy kijelölje a hazai gazdaságpolitika kívánatos irányvonalát. _______ The article briefly summarizes the developments of the optimum currency area (OCA) theory, while states some questions regarding the crises starting in 2008. Secondly, it reviews the solutions given by the economic and monetary union to the problems raised by the OCA theory and the crisis. Thirdly, it evaluates the pros and cons for Hungary to introduce the euro as its own currency in the light of the OCA theory, the state of the European legislation and the Hungarian track record and possibilities. Finally, it shows the desired direction for the official Hungarian economic and financial policy.

The economics of credit markets: theory and evidence.

Doutoramento em Economia.

Performance determinants For Swedish Financial Monetary Institutions: Panel Data evidence between 2010-2014.

Due to the rapid changes that governs the Swedish financial sector such as financial deregulations and technological innovations, it is imperative to examine the extent to which the Swedish Financial institutions had performed amid these changes. For this to be accomplish, the work investigates what are the determinants of performance for Swedish Financial Monetary Institutions? Assumptions were derived from theoretical and empirical literatures to investigate the authenticity of this research question using seven explanatory variables. Two models were specified using Returns on Asset (ROA) and Return on Equity (ROE) as the main performance indicators and for the sake of reliability and validity, three different estimators such as Ordinary Least Square (OLS), Generalized Least Square (GLS) and Feasible Generalized Least Square (FGLS) were employed. The Akaike Information Criterion (AIC) was also used to verify which specification explains performance better while performing robustness check of parameter estimates was done by correcting for standard errors. Based on the findings, ROA specification proves to have the lowest Akaike Information Criterion (AIC) and Standard errors compared to ROE specification. Under ROA, two variables; the profit margins and the Interest coverage ratio proves to be statistically significant while under ROE just the interest coverage ratio (ICR) for all the estimators proves significant. The result also shows that the FGLS is the most efficient estimator, then follows the GLS and the last OLS. when corrected for SE robust, the gearing ratio which measures the capital structure becomes significant under ROA and its estimate become positive under ROE robust. Conclusions were drawn that, within the period of study three variables (ICR, profit margins and gearing) shows significant and four variables were insignificant. The overall findings show that the institutions strive to their best to maximize returns but these returns were just normal to cover their costs of operation. Much should be done as per the ASC theory to avoid liquidity and credit risks problems. Again, estimated values of ICR and profit margins shows that a considerable amount of efforts with sound financial policies are required to increase performance by one percentage point. Areas of further research could be how the individual stochastic factors such as the Dupont model, repo rates, inflation, GDP etc. can influence performance.

[the Teaching Of Social Sciences In Health: Between Practice And Theory].

The models of teaching social sciences and clinical practice are insufficient for the needs of practical-reflective teaching of social sciences applied to health. The scope of this article is to reflect on the challenges and perspectives of social science education for health professionals. In the 1950s the important movement bringing together social sciences and the field of health began, however weak credentials still prevail. This is due to the low professional status of social scientists in health and the ill-defined position of the social sciences professionals in the health field. It is also due to the scant importance attributed by students to the social sciences, the small number of professionals and the colonization of the social sciences by the biomedical culture in the health field. Thus, the professionals of social sciences applied to health are also faced with the need to build an identity, even after six decades of their presence in the field of health. This is because their ambivalent status has established them as a partial, incomplete and virtual presence, requiring a complex survival strategy in the nebulous area between social sciences and health.

Atomic Charge Transfer-counter Polarization Effects Determine Infrared Ch Intensities Of Hydrocarbons: A Quantum Theory Of Atoms In Molecules Model.

Atomic charge transfer-counter polarization effects determine most of the infrared fundamental CH intensities of simple hydrocarbons, methane, ethylene, ethane, propyne, cyclopropane and allene. The quantum theory of atoms in molecules/charge-charge flux-dipole flux model predicted the values of 30 CH intensities ranging from 0 to 123 km mol(-1) with a root mean square (rms) error of only 4.2 km mol(-1) without including a specific equilibrium atomic charge term. Sums of the contributions from terms involving charge flux and/or dipole flux averaged 20.3 km mol(-1), about ten times larger than the average charge contribution of 2.0 km mol(-1). The only notable exceptions are the CH stretching and bending intensities of acetylene and two of the propyne vibrations for hydrogens bound to sp hybridized carbon atoms. Calculations were carried out at four quantum levels, MP2/6-311++G(3d,3p), MP2/cc-pVTZ, QCISD/6-311++G(3d,3p) and QCISD/cc-pVTZ. The results calculated at the QCISD level are the most accurate among the four with root mean square errors of 4.7 and 5.0 km mol(-1) for the 6-311++G(3d,3p) and cc-pVTZ basis sets. These values are close to the estimated aggregate experimental error of the hydrocarbon intensities, 4.0 km mol(-1). The atomic charge transfer-counter polarization effect is much larger than the charge effect for the results of all four quantum levels. Charge transfer-counter polarization effects are expected to also be important in vibrations of more polar molecules for which equilibrium charge contributions can be large.

Beliefs Related To Adherence To Oral Antidiabetic Treatment According To The Theory Of Planned Behavior.

to identify salient behavioral, normative, control and self-efficacy beliefs related to the behavior of adherence to oral antidiabetic agents, using the Theory of Planned Behavior. cross-sectional, exploratory study with 17 diabetic patients in chronic use of oral antidiabetic medication and in outpatient follow-up. Individual interviews were recorded, transcribed and content-analyzed using pre-established categories. behavioral beliefs concerning advantages and disadvantages of adhering to medication emerged, such as the possibility of avoiding complications from diabetes, preventing or delaying the use of insulin, and a perception of side effects. The children of patients and physicians are seen as important social references who influence medication adherence. The factors that facilitate adherence include access to free-of-cost medication and taking medications associated with temporal markers. On the other hand, a complex therapeutic regimen was considered a factor that hinders adherence. Understanding how to use medication and forgetfulness impact the perception of patients regarding their ability to adhere to oral antidiabetic agents. medication adherence is a complex behavior permeated by behavioral, normative, control and self-efficacy beliefs that should be taken into account when assessing determinants of behavior.