Monetary and banking policy of Chile.

Mode of access: Internet.

Monetary theory and fiscal policy.

Mode of access: Internet.

Asset Price Instability and Policy Responses: The Legacy of Liberalisation

The debate about the dynamics and potential policy responses to asset inflation has intensified in recent years. Some analysts, notably Borio and Lowe, have called for 'subtle' changes to existing monetary targeting frameworks to try to deal with the problems of asset inflation and have attempted to developed indicators of financial vulnerability to aid this process. In contrast, this paper argues that the uncertainties involved in understanding financial market developments and their potential impact on the real economy are likely to remain too high to embolden policy makers. The political and institutional risks associated with policy errors are also significant. The fundamental premise that a liberalised financial system is based on 'efficient' market allocation cannot be overlooked. The corollary is that any serious attempt to stabilize financial market outcomes must involve at least a partial reversal of deregulation.

Macroeconomic policy in an output-expenditure model

This paper proposes an alternative framework for examining the international macroeconomic impact of domestic monetary and fiscal policies and focuses on the distinction between national spending and national production and the reactive behavior of foreign investors to changing external account balances. It demonstrates that under a floating exchange rate regime, monetary and fiscal policies can affect aggregate expenditure and output quite differently, with important implications for the behavior of the exchange rate, the current account balance, and national income in the short run, as well as the economy's price level in the long run. In particular, this paper predicts that expansionary monetary and fiscal policies tend to depreciate the currency and only temporarily raise gross domestic product and the current account surplus, although permanently raise the domestic price level. This is a revised version of a paper presented at the Forty-Ninth International Atlantic Economic Conference, March 14–21, 2000, Munich, Germany.

The impact of Ireland’s current Mental Health Policy on the profile of community mental Health Services

RESUMO: Em 2006, foi aprovada uma nova política governamental para a saúde mental intitulada “Uma Visão para a Mudança”, a qual está neste momento no sétimo ano de implementação. A política descreve um enquadramento para o desenvolvimento e promoção da saúde mental positiva para toda a Comunidade e para a prestação de serviços acessíveis, baseados na comunidade, serviços especializados para pessoas com doença mental. A implementação da política e o tornar a “Vision for Change” uma realidade têm sido problemáticos, com críticas consideráveis por parte dos intervenientes, relativas à lenta e desconexa implementação. Este estudo fornece informação sobre as características dos serviços de três importantes tipos de instituições de saúde mental comunitária a nível nacional, nomeadamente Hospitais de Dia, Centros de Dia e residências comunitárias operantes 24 horas. A pesquisa analisa objetivos e funções, perfis dos pacientes, atividades terapêuticas, a eficácia das redes de comunicação e beneficia da perspectiva dos funcionários sobre o que mudou no terreno ao longo dos últimos sete anos. As questões identificadas a partir das características dos três serviços dizem respeito a todos. Os participantes indicaram que o ethos da recuperação parece ter alcançado um papel mais central no tratamento do paciente na comunidade mas reconheceram que o desafio de integrar os princípios de recuperação na prática clínica se mantém presente. Parece ser reconhecida a importância da planificação do cuidado individual nos serviços comunitários e os entrevistados indicaram que existe um empenho para garantir o envolvimento do usuário do serviço. Há diferenças entre os „pontos de vista do pessoal‟ e os „pontos de vista dos representantes‟ sobre uma série de aspetos da prestação de serviços. Este é o primeiro estudo irlandês deste género a examinar a prestação de serviços das três principais instituições comunitárias de saúde mental num só estudo. Estes serviços representam um enorme investimento em recursos, quer a nível monetário, quer humano. O estudo examinou os desafios e as questões fundamentais que lhe são aplicáveis e que têm impacto nestes três tipos de prestação de serviços. Também forneceu informações sobre os elementos de mudança positiva, os quais se começam a focar lentamente na prestação do serviço, assim como na importância da centralidade do utilizador do serviço e na promoção de um ethos da recuperação.----------ABSTRACT: In 2006, a new Government policy for mental health “A Vision for Change” was endorsed and is currently in the seventh year of implementation. The policy describes a comprehensive framework for building and fostering positive mental health across the entire community and for providing accessible, community based, specialist services for people with mental illness. The implementation of the policy and turning “Vision for Change” into reality has been problematic with considerable criticism from stakeholders concerning slow and disjointed implementation. This study provides information on three key community mental health service settings, namely Day Hospitals, Day Centres and 24 Hour Community Residences at a national level. The research looks at aims and functions, patient profiles, therapeutic activities, effectiveness of key communication networks and gains an insight from staff on what has changed on the ground over the past seven years. Issues identified from the three service settings pertain to all. Participants indicated that the recovery ethos appears to have moved to a more central role in patient care in the community but acknowledged that the challenge of integrating recovery principles in clinical practice remains present. The importance of individual care planning appears to be recognised in community services and respondents indicated that efforts are being made to ensure service user involvement. There were differences between „staff views‟ and „advocate views‟ on a number of aspects of service provision. This is the first Irish study of its kind to examine service provision across the three main community mental health settings in one study. These services represent a huge investment in resources both on a monetary and human level. This study has examined the challenges and key issues which are applicable and impacting on all three types of service provision. It has also provided information on the elements of positive change, which are slowly embedding themselves in service provision such as the importance of the centricity of the service user and the promotion of a recovery ethos.

Should fiscal authorities cooperate in a monetary union with public deficit targets?

In this paper we analyse the setting of optimal policies in a monetary union with one monetary authority and various fiscal authorities that have a public deficit target. We will show that fiscal cooperation among the fiscal authorities, in the presence of positive supply shocks, ends up producing higher public deficits than in a non-cooperative regime. JEL No. E61, E63, F33, H0. Keywords: monetary union, fiscal policy coordination.

Price differentials in monetary unions: The role of fiscal shocks

We study the effect of regional expenditure and revenue shocks on price differentials for47 US states and 9 EU countries. We identify shocks using sign restrictions on the dynamicsof deficits and output and construct two estimates for structural price differentials dynamics which optimally weight the information contained in the data for all units. Fiscal shocks explain between 14 and 23 percent of the variability of price differentials both in the US and in the EU. On average, expansionary fiscal disturbances produce positive price differential responses while distortionary balance budget shocks produce negative price differential responses. In a number of units, price differential responses to expansionary fiscal shocks are negative. Spillovers and labor supply effects partially explain this pattern while geographical, political, and economic indicators do not.

Ethique du policy maker et dynamique macroéconomique en régime de Currency Board : le cas de Djibouti

Full Text / Article complet

The policy mix and macroeconomic adjustment in the Euro area. CEPS Commentary, 15 October 2012

Against the background of the IMF’s latest global economic forecast, Jørgen Mortensen and Cinzia Alcidi raise questions in a new CEPS Commentary about the timing of the implementation and the effects of the three main categories of economic policy – fiscal, monetary and structural.

Options for a Euro-area fiscal capacity. Bruegel Policy Brief 2013/01, January 2013

Europe has responded to the crisis with strengthened budgetary and macroeconomic surveillance, the creation of the European Stability Mechanism, liquidity provisioning by resilient economies and the European Central Bank and a process towards a banking union. However, a monetary union requires some form of budget for fiscal stabilisation in case of shocks, and as a backstop to the banking union. This paper compares four quantitatively different schemes of fiscal stabilisation and proposes a new scheme based on GDP-indexed bonds. The options considered are: (i) A federal budget with unemployment and corporate taxes shifted to euro-area level; (ii) a support scheme based on deviations from potential output;(iii) an insurance scheme via which governments would issue bonds indexed to GDP, and (iv) a scheme in which access to jointly guaranteed borrowing is combined with gradual withdrawal of fiscal sovereignty. Our comparison is based on strong assumptions. We carry out a preliminary, limited simulation of how the debt-to-GDP ratio would have developed between 2008-14 under the four schemes for Greece, Ireland, Portugal, Spain and an ‘average’ country.The schemes have varying implications in each case for debt sustainability

The monetary benefit of early flood warnings in Europe

Effective disaster risk management relies on science-based solutions to close the gap between prevention and preparedness measures. The consultation on the United Nations post-2015 framework for disaster risk reduction highlights the need for cross-border early warning systems to strengthen the preparedness phases of disaster risk management, in order to save lives and property and reduce the overall impact of severe events. Continental and global scale flood forecasting systems provide vital early flood warning information to national and international civil protection authorities, who can use this information to make decisions on how to prepare for upcoming floods. Here the potential monetary benefits of early flood warnings are estimated based on the forecasts of the continental-scale European Flood Awareness System (EFAS) using existing flood damage cost information and calculations of potential avoided flood damages. The benefits are of the order of 400 Euro for every 1 Euro invested. A sensitivity analysis is performed in order to test the uncertainty in the method and develop an envelope of potential monetary benefits of EFAS warnings. The results provide clear evidence that there is likely a substantial monetary benefit in this cross-border continental-scale flood early warning system. This supports the wider drive to implement early warning systems at the continental or global scale to improve our resilience to natural hazards.

A note on policy, the composition of public expenditures and economic growth

In this article we study the growth and welfare effects of fiscal and monetary policies in economies where public investment is part of the productive process we present four different models that share the same technology with public infrastructure as a separate argument of the production function. We show that growth is maximized at positive levels of income tax and inflation. However, unless there are no transfers or public goods in the economy, maximization of growth does not imply welfare maximization we show that the optimal tax rate is greater than the rate that maximizes growth and the optimal rate of money creation is below the growth maximizing rate. With public infrastructure in the production function we no longer obtain superneutrality in the Sidrausky model.