A restatement of the welafare costs of inflation. The wast of scarce resources in the manufacturing , banking and household sectors

Lucas (2000) estimates that the US welfare costs of inflation are around 1% of GDP. This measurement is consistent with a speci…c distorting channel in terms of the Bailey triangle under the demand for monetary base schedule (outside money): the displacement of resources from the production of consumption goods to the household transaction time à la Baumol. Here, we consider also several new types of distortions in the manufacturing and banking industries. Our new evidences show that both banks and firms demand special occupational employments to avoid the inflation tax. We de…ne the concept of ”the foat labor”: The occupational employments that are aflected by the in‡ation rates. More administrative workers are hired relatively to the bluecollar workers for producing consumption goods. This new phenomenon makes the manufacturing industry more roundabout. To take into account this new stylized fact and others, we redo at same time both ”The model 5: A Banking Sector -2” formulated by Lucas (1993) and ”The Competitive Banking System” proposed by Yoshino (1993). This modelling allows us to characterize better the new types of misallocations. We …nd that the maximum value of the resources wasted by the US economy happened in the years 1980-81, after the 2nd oil shock. In these years, we estimate the excess resources that are allocated for every speci…c distorting channel: i) The US commercial banks spent additional resources of around 2% of GDP; ii) For the purpose of the firm foating time were used between 2.4% and 4.1% of GDP); and iii) For the household transaction time were allocated between 3.1% and 4.5 % of GDP. The Bailey triangle under the demand for the monetary base schedule represented around 1% of GDP, which is consistent with Lucas (2000). We estimate that the US total welfare costs of in‡ation were around 10% of GDP in terms of the consumption goods foregone. The big di¤erence between our results and Lucas (2000) are mainly due to the Harberger triangle in the market for loans (inside money) which makes part of the household transaction time, of the …rm ‡oat labor and of the distortion in the banking industry. This triangle arises due to the widening interest rates spread in the presence of a distorting inflation tax and under a fractionally reserve system. The Harberger triangle can represent 80% of the total welfare costs of inflation while the remaining percentage is split almost equally between the Bailey triangle and the resources used for the bank services. Finally, we formulate several theorems in terms of the optimal nonneutral monetary policy so as to compare with the classical monetary theory.

Remittances by emigrants: issues and evidence

Includes bibliography

Perfil do crédito à pessoa jurídica no Brasil entre 1994 e 2007

Coordenação de Aperfeiçoamento de Pessoal de Nível Superior (CAPES)

CEPAL Review no.25

The Latin American economy during 1984: a preliminary overview / Enrique V. Iglesias / The transnational corporations and Latin America’s international trade / Eugenio Lahera. -- The subsidiary role of direct foreign investment in industrialization: the Colombian manufacturing sector / Michael Mortimore. -- Stabilization and adjustment policies in the southern cone, 1974-1983 / Joseph Ramos. -- Rural development and urban food programming / Manuel Figueroa L. -- Dependent societies and crisis in Latin America: the challenges of social and political transformation / Germán W. Rama and Enzo Faletto. -- Culture, discourse (self-expression) and social development in the Caribbean / Jean Casimir. -- Legal aspects of the Latin American public debt: relations with the commercial banks / Gonzalo Biggs.

A crise do desenvolvimento brasileiro: dívida externa, condicionalidades e as relações com o Fundo Monetário Internacional e Banco Mundial (1974-1987)

Coordenação de Aperfeiçoamento de Pessoal de Nível Superior (CAPES)

Eficiência bancária no Brasil: uma análise envoltória de dados (DEA)

Fundação de Amparo à Pesquisa do Estado de São Paulo (FAPESP)

Foreign and Domestic Bank Performances: An Ideal Decomposition of Industry Dynamics

The aggregate performance of the banking industry depends on the underlying microlevel dynamics within that industry. adjustments within banks, reallocations between banks, entries of new banks, and exits of existing banks. This paper develops a generalized ideal dynamic decomposition and applies it to the return on equity of foreign and domestic commercial banks in Korea from 1994 to 2000. The sample corresponds to the Asian financial crisis and the final stages of a long process of deregulation and privatization in the Korean banking industry. The comparison of our findings reveals that the overall performance of Korean banks largely reflects individual bank efficiencies, except immediately after the Asian financial crisis where restructuring played a more important role on average bank performance. Moreover, Korean regional banks started the restructuring process about one year before the Korean nationwide banks. Foreign bank performance, however, largely reflected individual bank efficiencies, even immediately after the Asian financial crisis.

Bank Performance: Market Power or Efficient Structure?

Regulatory change not seen since the Great Depression swept the U.S. banking industry beginning in the early 1980s, culminating with the Interstate Banking and Branching Efficiency Act of 1994. Significant consolidations have occurred in the banking industry. This paper considers the market-power versus the efficient-structure theories of the positive correlation between banking concentration and performance on a state-by-state basis. Temporal causality tests imply that bank concentration leads bank profitability, supporting the market-power, rather than the efficient-structure, theory of that positive correlation. Our finding suggests that bank regulators, by focusing on local banking markets, missed the initial stages of an important structural change at the state level.

Estado, banca y crédito agrícola en Sinaloa y Sonora : El Banco de Sinaloa y el Banco Agrícola Sonorense, 1933-1976

En el Noroeste de México el incremento en la productividad agrícola entre los años de 1940 y 1970, fue debido a la expansión de las tierras de cultivo, el uso de fertilizantes y semillas mejoradas, la mecanización, la mayor disponibilidad de créditos, a los sistemas de irrigación y el mejoramiento de las carreteras. Así como la importante intervención del Estado mexicano al implementar políticas de inversión con el apoyo de agencias internacionales de desarrollo, y otorgar facilidades de crédito para el desarrollo de la agricultura a través de la creación de bancos agrícolas oficiales y las facilidades para la constitución de bancos privados comerciales.Después de la desarticulación de la banca en México debido a la revolución, se avanzó con pasos firmes en la reestructuración del sistema bancario con la creación de una nueva legislación bancaria, la fundación del Banco de México y la Comisión Nacional Bancaria en 1924; Banco Nacional de Crédito Agrícola (1926), el Banco Nacional de Crédito Ejidal (1935), el Banco Nacional de Comercio Exterior (1937) y el Banco Nacional Agropecuario (1965), que dieron apoyo financiero a los pequeños agricultores y ejidatarios. Los principales agricultores de Sinaloa y Sonora en colaboración con el gobierno federal a través de la Comisión Monetaria y el Banco de México fundaron el Banco de Sinaloa y el Banco Agrícola Sonorense en 1933. Explicar el impacto que tuvieron estas instituciones financieras en el crédito agrícola de Sinaloa y Sonora será el objetivo central de este trabajo.

Estado, banca y crédito agrícola en Sinaloa y Sonora : El Banco de Sinaloa y el Banco Agrícola Sonorense, 1933-1976

En el Noroeste de México el incremento en la productividad agrícola entre los años de 1940 y 1970, fue debido a la expansión de las tierras de cultivo, el uso de fertilizantes y semillas mejoradas, la mecanización, la mayor disponibilidad de créditos, a los sistemas de irrigación y el mejoramiento de las carreteras. Así como la importante intervención del Estado mexicano al implementar políticas de inversión con el apoyo de agencias internacionales de desarrollo, y otorgar facilidades de crédito para el desarrollo de la agricultura a través de la creación de bancos agrícolas oficiales y las facilidades para la constitución de bancos privados comerciales.Después de la desarticulación de la banca en México debido a la revolución, se avanzó con pasos firmes en la reestructuración del sistema bancario con la creación de una nueva legislación bancaria, la fundación del Banco de México y la Comisión Nacional Bancaria en 1924; Banco Nacional de Crédito Agrícola (1926), el Banco Nacional de Crédito Ejidal (1935), el Banco Nacional de Comercio Exterior (1937) y el Banco Nacional Agropecuario (1965), que dieron apoyo financiero a los pequeños agricultores y ejidatarios. Los principales agricultores de Sinaloa y Sonora en colaboración con el gobierno federal a través de la Comisión Monetaria y el Banco de México fundaron el Banco de Sinaloa y el Banco Agrícola Sonorense en 1933. Explicar el impacto que tuvieron estas instituciones financieras en el crédito agrícola de Sinaloa y Sonora será el objetivo central de este trabajo.

Estado, banca y crédito agrícola en Sinaloa y Sonora : El Banco de Sinaloa y el Banco Agrícola Sonorense, 1933-1976

En el Noroeste de México el incremento en la productividad agrícola entre los años de 1940 y 1970, fue debido a la expansión de las tierras de cultivo, el uso de fertilizantes y semillas mejoradas, la mecanización, la mayor disponibilidad de créditos, a los sistemas de irrigación y el mejoramiento de las carreteras. Así como la importante intervención del Estado mexicano al implementar políticas de inversión con el apoyo de agencias internacionales de desarrollo, y otorgar facilidades de crédito para el desarrollo de la agricultura a través de la creación de bancos agrícolas oficiales y las facilidades para la constitución de bancos privados comerciales.Después de la desarticulación de la banca en México debido a la revolución, se avanzó con pasos firmes en la reestructuración del sistema bancario con la creación de una nueva legislación bancaria, la fundación del Banco de México y la Comisión Nacional Bancaria en 1924; Banco Nacional de Crédito Agrícola (1926), el Banco Nacional de Crédito Ejidal (1935), el Banco Nacional de Comercio Exterior (1937) y el Banco Nacional Agropecuario (1965), que dieron apoyo financiero a los pequeños agricultores y ejidatarios. Los principales agricultores de Sinaloa y Sonora en colaboración con el gobierno federal a través de la Comisión Monetaria y el Banco de México fundaron el Banco de Sinaloa y el Banco Agrícola Sonorense en 1933. Explicar el impacto que tuvieron estas instituciones financieras en el crédito agrícola de Sinaloa y Sonora será el objetivo central de este trabajo.

Transformation of the Financial Sector in Indonesia

Introduction : The source and deployment of finance are central issues in economic development. Since 1966, when the Soeharto Administration was inaugurated, Indonesian economic development has relied on funds in the form of aid from international organizations and foreign countries. After the 1990s, a further abundant inflow of capital sustained a rapid economic development. Foreign funding was the basis of Indonesian economic growth. This paper will describe the mechanism for allocating funds in the Indonesian economy. It will identify the problems this mechanism generated in the Indonesian experience, and it will attempt to explain why there was a collapse of the financial system in the wake of the Asian Currency Crisis of 1997. History of the Indonesian Financial system The year 1966 saw the emergence of commercial banks in Indonesia. It can be said that before 1966 a financial system hardly existed, a fact commonly attributed to economic disruptions like the consecutive runs of fiscal deficit and hyperinflation under the Soekarno Administration. After 1996, with the inauguration of Soeharto, a regulatory system of financial legislation, e.g. central banking law and banking regulation, was introduced and implemented, and the banking sector that is the basis of the current financial system in Indonesia was built up. 　　　The Indonesian financial structure was significantly altered at the first financial reform of 1983. Between 1966 and 1982, the banking sector consisted of Bank Indonesia (the Central Bank) and the state-owned banks. There was also a system for distributing the abundant public revenue derived from the soaring oil price of the 1970s. The public finance distribution function, incorporated in Indonesian financial system, changed after the successive financial reforms of 1983 and 1988, when there was a move away from the monopoly-market style dominated by state-owned banks (which was a system of public finance distribution that operated at the discretion of the government) towards a modern market mechanism. The five phases of development The Indonesian financial system developed in five phases between 1966 and the present time. The first period (1966-72) was its formative period, the second (1973-82) its policy based finance period under soaring oil prices, the third (1983-91) its financial-reform period, the fourth (1992-97) its period of expansion, and the fifth (1998-) its period of financial restructuring. The first section of this paper summarizes the financial policies operative during each of the periods identified above. In the second section changes to the financial sector in response to policies are examined, and an analysis of these changes shows that an important development of the financial sector occurred during the financial reform period. In the third section the focus of analysis shifts from the general financial sector to particular commercial banks’ performances. In the third section changes in commercial banks’ lending and fund-raising behaviour after the 1990s are analysed by comparing several banking groups in terms of their ownership and foundation time. The last section summarizes the foregoing analyses and examines the problems that remain in the Indonesian financial sector, which is still undergoing restructuring.

Market discipline by depositors : impact of deposit insurance on the Indonesian banking sector

This paper investigates market discipline by depositors in the Indonesian banking sector. Does depositor discipline fulfill its role in Indonesia? Does deposit insurance affect depositor behavior thereby imposing discipline on banks? These questions are empirically examined using panel data on Indonesian commercial banks from 1998 to 2009. In Indonesia deposit insurance was introduced in 2005. Depositor discipline is examined by two measures: change in the amount of deposits and interest rate. The empirical results show that depositors pay attention to bank soundness and riskiness and select banks based on the bank's condition with particular attention paid to equity ratio. It is found that depositors impose discipline on banks, but it varies according to regulatory and economic circumstances.

Impact of foreign capital entry in the Indonesian banking sector

After the Asian financial crisis of 1997/98, the Indonesian banking sector experienced significant changes. Ownership structure of banking sector is substantially-changed. Currently, ownership of major commercial banks is dominated by foreign capital through acquisition. This paper examines whether foreign ownership changes a bank’s lending behavior and performance. Foreign banks tend to lend mainly to large firms; this paper examines whether the credit to small and medium-sized enterprises (SMEs) is affected by foreign capital entry into the Indonesian banking sector. Empirical results show that banks owned by foreign capital tend to decrease SME credit.

A study of four listed micro finance institutions

Compared to the size of the microfinance market, the number of Microfinance Institutions that are professionally ran like commercial banks is still scarce, and even more scarce are the MFI listed in public stock exchanges. This document focuses on four listed MFIs and reviews its business model and funding sources. The document also analyses the market price evolution of the listed shares and investigates whether investors are assigning a premium to the MFIs compared with its respective market indices. Keywords: Microfinance institutions, Micro-credits, Financial Institutions, Equity; Stock Exchange.