Amy Verdun
- Published in print:
- 2000
- Published Online:
- November 2003
- ISBN:
- 9780198297574
- eISBN:
- 9780191598982
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0198297572.003.0005
- Subject:
- Political Science, European Union
The Economic and Monetary Union (EMU) resulted from the convergence of ideas about the aim of monetary policy and the design of EMU. It will lead to a further revival of the EU if there remains a ...
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The Economic and Monetary Union (EMU) resulted from the convergence of ideas about the aim of monetary policy and the design of EMU. It will lead to a further revival of the EU if there remains a clear consensus and widespread support for common ideas on the objectives of economic and monetary policy. On the other hand, the EMU may pose a serious risk to the integration process if its costs and benefits are unevenly spread across EU member states, sectors, regions, and citizens.Less
The Economic and Monetary Union (EMU) resulted from the convergence of ideas about the aim of monetary policy and the design of EMU. It will lead to a further revival of the EU if there remains a clear consensus and widespread support for common ideas on the objectives of economic and monetary policy. On the other hand, the EMU may pose a serious risk to the integration process if its costs and benefits are unevenly spread across EU member states, sectors, regions, and citizens.
Miriam L. Campanella
- Published in print:
- 2000
- Published Online:
- November 2003
- ISBN:
- 9780198297574
- eISBN:
- 9780191598982
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0198297572.003.0006
- Subject:
- Political Science, European Union
This chapter examines the conflict between the European Central Bank (ECB) and Council of Ministers and the Economic and Finance Ministers of the eleven countries taking part in the common currency ...
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This chapter examines the conflict between the European Central Bank (ECB) and Council of Ministers and the Economic and Finance Ministers of the eleven countries taking part in the common currency (ECOFIN-11). The theoretical game of chicken is used to highlight the preferences of the two parties and ensuing dynamics. It is shown that the ECB’s commitment to its institutional objective counters political authorities’ attempts to gain fiscal dominance over monetary policy.Less
This chapter examines the conflict between the European Central Bank (ECB) and Council of Ministers and the Economic and Finance Ministers of the eleven countries taking part in the common currency (ECOFIN-11). The theoretical game of chicken is used to highlight the preferences of the two parties and ensuing dynamics. It is shown that the ECB’s commitment to its institutional objective counters political authorities’ attempts to gain fiscal dominance over monetary policy.
Joseph E. Stiglitz, José Antonio Ocampo, Shari Spiegel, Ricardo Ffrench-Davis, and Deepak Nayyar
- Published in print:
- 2006
- Published Online:
- September 2006
- ISBN:
- 9780199288144
- eISBN:
- 9780191603884
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199288143.003.0005
- Subject:
- Economics and Finance, Development, Growth, and Environmental
This chapter focuses on the use of fiscal and monetary policies (including an analysis of the macroeconomic dimensions of prudential regulations) for a closed economy by contrasting Keynesian, ...
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This chapter focuses on the use of fiscal and monetary policies (including an analysis of the macroeconomic dimensions of prudential regulations) for a closed economy by contrasting Keynesian, heterodox, and conservative perspectives on the effectiveness of various instruments and their ancillary effects. While conservatives believe that fiscal policy is ineffective due to offsetting actions, standard Keynesians believe that government expenditures have a multiplier effect, and heterodox economists believe there may also be a financial accelerator if firms are cash or credit constrained. Similarly, while conservative economists believe that deficit spending maybe be counterproductive and can lead to crowding out and a loss of investor confidence, heterodox and Keynesians believe that there may be crowding in and that a strong economy builds investor confidence. The disagreements extend to views of monetary policy as well where conservatives believe that monetary policy is largely ineffective, Keynesians believe that monetary policy is an important tool in macroeconomic management, and heterodox economists emphasize that credit, and not the money supply, matters for the level of economic activity. Finally, heterodox economists have also designed ways to use prudential regulations as a tool for macroeconomic policy.Less
This chapter focuses on the use of fiscal and monetary policies (including an analysis of the macroeconomic dimensions of prudential regulations) for a closed economy by contrasting Keynesian, heterodox, and conservative perspectives on the effectiveness of various instruments and their ancillary effects. While conservatives believe that fiscal policy is ineffective due to offsetting actions, standard Keynesians believe that government expenditures have a multiplier effect, and heterodox economists believe there may also be a financial accelerator if firms are cash or credit constrained. Similarly, while conservative economists believe that deficit spending maybe be counterproductive and can lead to crowding out and a loss of investor confidence, heterodox and Keynesians believe that there may be crowding in and that a strong economy builds investor confidence. The disagreements extend to views of monetary policy as well where conservatives believe that monetary policy is largely ineffective, Keynesians believe that monetary policy is an important tool in macroeconomic management, and heterodox economists emphasize that credit, and not the money supply, matters for the level of economic activity. Finally, heterodox economists have also designed ways to use prudential regulations as a tool for macroeconomic policy.
Fritz W. Scharpf
- Published in print:
- 2000
- Published Online:
- November 2003
- ISBN:
- 9780199240883
- eISBN:
- 9780191600173
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199240884.003.0002
- Subject:
- Political Science, Comparative Politics
The chapter examines the common pressures on employment and the welfare state that originated from changes in the international economic environment after the early 1970s, and it relates these to ...
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The chapter examines the common pressures on employment and the welfare state that originated from changes in the international economic environment after the early 1970s, and it relates these to national economic conditions and policy legacies in order to identify differences of vulnerability and varying demands on the institutional capacity for policy adjustment. In the earlier period until the mid‐1980s, these challenges were of a macro‐economic nature, and the effectiveness of national policy responses depended primarily on institutional capabilities for effective coordination between wage policy and monetary policy. After the mid‐1980s, the dominant challenges arose from the global integration of capital markets and the increasing intensity of international competition in product markets. Now the greater or lesser vulnerability of countries was primarily determined by the structure of their welfare states – in particular by the dependence on particular sources of finance and by their effects on service employment in the sheltered sectors. What mattered was the institutional and political capacity to adopt and implement unpopular changes in the policy legacies of the welfare state.Less
The chapter examines the common pressures on employment and the welfare state that originated from changes in the international economic environment after the early 1970s, and it relates these to national economic conditions and policy legacies in order to identify differences of vulnerability and varying demands on the institutional capacity for policy adjustment. In the earlier period until the mid‐1980s, these challenges were of a macro‐economic nature, and the effectiveness of national policy responses depended primarily on institutional capabilities for effective coordination between wage policy and monetary policy. After the mid‐1980s, the dominant challenges arose from the global integration of capital markets and the increasing intensity of international competition in product markets. Now the greater or lesser vulnerability of countries was primarily determined by the structure of their welfare states – in particular by the dependence on particular sources of finance and by their effects on service employment in the sheltered sectors. What mattered was the institutional and political capacity to adopt and implement unpopular changes in the policy legacies of the welfare state.
Geoffrey R. D. Underhill
- Published in print:
- 2002
- Published Online:
- November 2003
- ISBN:
- 9780199250257
- eISBN:
- 9780191599101
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199250251.003.0002
- Subject:
- Political Science, European Union
Aims to set the context for this volume, examining the relationship between the EU as a monetary space and the global monetary and financial system, and the implications of this relationship for the ...
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Aims to set the context for this volume, examining the relationship between the EU as a monetary space and the global monetary and financial system, and the implications of this relationship for the Euro‐zone member states and corporate governance. It elaborates four arguments: first, that there exist strong incentives for policy‐makers at national and EU levels to show a ‘benign neglect’ in their management of the euro's exchange rate; second, that these incentives are reinforced by a lack of clear institutional responsibility for such management; third, that there are considerable pressures for convergence defined less in terms of post‐war forms of socio‐democratic consensus, and more in terms of Anglo‐American, market‐led adjustment processes; and fourth, that these processes are themselves being reinforced by developments in corporate restructuring and models of corporate governance. These arguments combine to place the ‘stability culture’ on a narrow monetary basis—if it is not good enough, for enough of the people, enough of the time, then it will be in jeopardy.Less
Aims to set the context for this volume, examining the relationship between the EU as a monetary space and the global monetary and financial system, and the implications of this relationship for the Euro‐zone member states and corporate governance. It elaborates four arguments: first, that there exist strong incentives for policy‐makers at national and EU levels to show a ‘benign neglect’ in their management of the euro's exchange rate; second, that these incentives are reinforced by a lack of clear institutional responsibility for such management; third, that there are considerable pressures for convergence defined less in terms of post‐war forms of socio‐democratic consensus, and more in terms of Anglo‐American, market‐led adjustment processes; and fourth, that these processes are themselves being reinforced by developments in corporate restructuring and models of corporate governance. These arguments combine to place the ‘stability culture’ on a narrow monetary basis—if it is not good enough, for enough of the people, enough of the time, then it will be in jeopardy.
Joseph Stiglitz, José Antonio Ocampo, Shari Spiegel, Ricardo Ffrench-Davis, and Deepak Nayyar
- Published in print:
- 2006
- Published Online:
- September 2006
- ISBN:
- 9780199288144
- eISBN:
- 9780191603884
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199288143.001.0001
- Subject:
- Economics and Finance, Development, Growth, and Environmental
This book discusses the current debates on macroeconomics, capital market liberalization, and development, and develops a new framework within which one can assess alternative policies. The authors ...
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This book discusses the current debates on macroeconomics, capital market liberalization, and development, and develops a new framework within which one can assess alternative policies. The authors share the belief that the Washington consensus has advocated for narrow goals for development (with a focus on price stability), prescribed too few policy instruments (emphasizing monetary and fiscal policies), and places unwarranted faith in the role of markets. The new framework focuses on real stability and long-term sustainable and equitable growth, offers a variety of non-standard ways to stabilize the economy and promote growth, and accepts that market imperfections necessitate government interventions. Economists have traditionally divided their field into macroeconomics and microeconomics, with macroeconomics further divided into stabilization policy and growth. Since most policy discussions and much of the assignment of institutional responsibilities have followed these divisions, policy-makers have pursued stabilization goals with little concern for growth consequences, while trying to increase growth through structural reforms focused on improving economic efficiency. Moreover, structural policies, such as capital market liberalization, have had major consequences for economic stability. This book challenges these divisions by arguing that stabilization policy has important consequences for long-term growth and has often been implemented with adverse consequences. The first part of the book introduces the key questions and looks at the objectives of economic policy from different perspectives. The second part examines the central issues of macroeconomics, presenting an analysis of economic models and policy perspectives on stabilization from conservative, Keynesian, and heterodox perspectives. The third part presents a similar analysis for capital market liberalization (CML).Less
This book discusses the current debates on macroeconomics, capital market liberalization, and development, and develops a new framework within which one can assess alternative policies. The authors share the belief that the Washington consensus has advocated for narrow goals for development (with a focus on price stability), prescribed too few policy instruments (emphasizing monetary and fiscal policies), and places unwarranted faith in the role of markets. The new framework focuses on real stability and long-term sustainable and equitable growth, offers a variety of non-standard ways to stabilize the economy and promote growth, and accepts that market imperfections necessitate government interventions. Economists have traditionally divided their field into macroeconomics and microeconomics, with macroeconomics further divided into stabilization policy and growth. Since most policy discussions and much of the assignment of institutional responsibilities have followed these divisions, policy-makers have pursued stabilization goals with little concern for growth consequences, while trying to increase growth through structural reforms focused on improving economic efficiency. Moreover, structural policies, such as capital market liberalization, have had major consequences for economic stability. This book challenges these divisions by arguing that stabilization policy has important consequences for long-term growth and has often been implemented with adverse consequences. The first part of the book introduces the key questions and looks at the objectives of economic policy from different perspectives. The second part examines the central issues of macroeconomics, presenting an analysis of economic models and policy perspectives on stabilization from conservative, Keynesian, and heterodox perspectives. The third part presents a similar analysis for capital market liberalization (CML).
Brigitte Granville
- Published in print:
- 2013
- Published Online:
- October 2017
- ISBN:
- 9780691145402
- eISBN:
- 9781400846443
- Item type:
- chapter
- Publisher:
- Princeton University Press
- DOI:
- 10.23943/princeton/9780691145402.003.0003
- Subject:
- Business and Management, Finance, Accounting, and Banking
This chapter describes how, since the 1980s, policymakers have managed to reduce and control inflation without unacceptably adverse welfare impacts by changing the monetary policy regime in a way ...
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This chapter describes how, since the 1980s, policymakers have managed to reduce and control inflation without unacceptably adverse welfare impacts by changing the monetary policy regime in a way that subjects policy to an external rule. The record in this period suggests that policymakers and economists have arrived at a better understanding of monetary policy and on how to keep the price level low and stable, while at the same time keeping real growth high and stable. This understanding incorporates three key beliefs. First, there is a natural rate of unemployment at which inflation is stable. Second, there is a transmission mechanism through which monetary policy actions affect the economy. Third monetary policymakers face trade-offs.Less
This chapter describes how, since the 1980s, policymakers have managed to reduce and control inflation without unacceptably adverse welfare impacts by changing the monetary policy regime in a way that subjects policy to an external rule. The record in this period suggests that policymakers and economists have arrived at a better understanding of monetary policy and on how to keep the price level low and stable, while at the same time keeping real growth high and stable. This understanding incorporates three key beliefs. First, there is a natural rate of unemployment at which inflation is stable. Second, there is a transmission mechanism through which monetary policy actions affect the economy. Third monetary policymakers face trade-offs.
Vivien A. Schmidt
- Published in print:
- 2002
- Published Online:
- November 2003
- ISBN:
- 9780199253685
- eISBN:
- 9780191600210
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199253684.003.0007
- Subject:
- Political Science, Comparative Politics
The different trajectories of Britain, France, and Germany cannot be understood without reference to the substantive content and interactive processes of their discourses of policy construction and ...
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The different trajectories of Britain, France, and Germany cannot be understood without reference to the substantive content and interactive processes of their discourses of policy construction and legitimization. The sustainability of Britain's early, radical move to neo‐liberal policies and more market capitalist practices has much to do with political actors’ transformative, communicative discourse that convinced the public that change was both necessary and appropriate in monetary policy, industrial policy, labour policy, as well as in the social assistance areas of social policy. France's later, more moderate neo‐liberal policies and its radical transformation of state capitalism owe much to political actors’ communicative discourse that was convincing on the necessity of reform in monetary and industrial policy arenas, but was unable to speak to the appropriateness of reform in social policy until the late 1990s. Finally, Germany's long delay on reform of its economic policies as well as of its managed capitalist practices are in part the result of the difficulties of generating a coordinative discourse capable of building agreement among policy actors on either the necessity or appropriateness of reform of the ‘social market economy’, in particular with regard to social and labour policy change.Less
The different trajectories of Britain, France, and Germany cannot be understood without reference to the substantive content and interactive processes of their discourses of policy construction and legitimization. The sustainability of Britain's early, radical move to neo‐liberal policies and more market capitalist practices has much to do with political actors’ transformative, communicative discourse that convinced the public that change was both necessary and appropriate in monetary policy, industrial policy, labour policy, as well as in the social assistance areas of social policy. France's later, more moderate neo‐liberal policies and its radical transformation of state capitalism owe much to political actors’ communicative discourse that was convincing on the necessity of reform in monetary and industrial policy arenas, but was unable to speak to the appropriateness of reform in social policy until the late 1990s. Finally, Germany's long delay on reform of its economic policies as well as of its managed capitalist practices are in part the result of the difficulties of generating a coordinative discourse capable of building agreement among policy actors on either the necessity or appropriateness of reform of the ‘social market economy’, in particular with regard to social and labour policy change.
David R. Cameron
- Published in print:
- 1998
- Published Online:
- April 2004
- ISBN:
- 9780198294641
- eISBN:
- 9780191601071
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0198294646.003.0007
- Subject:
- Political Science, European Union
Seeks to understand why some member‐states of the European Community attempted, with eventual success, to extend supranational authority in the domain of monetary and exchange‐rate policy and to ...
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Seeks to understand why some member‐states of the European Community attempted, with eventual success, to extend supranational authority in the domain of monetary and exchange‐rate policy and to anticipate some of the probable consequences of such extension. It begins by analysing the beliefs that originally underpinned the attempt, concerning the perceived need to resolve the community tensions inherent in independent economic policy‐making. It then considers the economic, political and institutional dilemmas, and uncertainties likely to confront member‐states as economic integration proceeds. Concentrating on the issues of low growth and high unemployment, it assesses how far European Monetary Union is likely to provide a remedy, and whether it will be necessary or desirable to create a counterweight to the authority of the European Central Bank, and to create new supranational organizations in the domain of European macroeconomic governance.Less
Seeks to understand why some member‐states of the European Community attempted, with eventual success, to extend supranational authority in the domain of monetary and exchange‐rate policy and to anticipate some of the probable consequences of such extension. It begins by analysing the beliefs that originally underpinned the attempt, concerning the perceived need to resolve the community tensions inherent in independent economic policy‐making. It then considers the economic, political and institutional dilemmas, and uncertainties likely to confront member‐states as economic integration proceeds. Concentrating on the issues of low growth and high unemployment, it assesses how far European Monetary Union is likely to provide a remedy, and whether it will be necessary or desirable to create a counterweight to the authority of the European Central Bank, and to create new supranational organizations in the domain of European macroeconomic governance.
Kenneth Dyson
- Published in print:
- 2000
- Published Online:
- November 2003
- ISBN:
- 9780199241651
- eISBN:
- 9780191599118
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199241651.003.0006
- Subject:
- Political Science, European Union
This chapter seeks to analyse prospects for the Euro‐zone's stability in terms of comparative history and economic theory. It begins by comparing the Euro‐zone with earlier examples of national ...
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This chapter seeks to analyse prospects for the Euro‐zone's stability in terms of comparative history and economic theory. It begins by comparing the Euro‐zone with earlier examples of national currency unification, and with the Bretton Woods system, focusing, in particular, on the formative experiences of the 20‐year period of the European Monetary System (EMS). The chapter goes on to discuss the meaning and sources of stability in economic theory, especially optimum currency area theory, neo‐liberal theory about labour markets, credibility theory, and ‘regulation’ theory. Particular attention is paid to the weaknesses of these theories in dealing with the crucial political dimension of Euro‐zone stability. It will be important for Euro‐zone stability that ECB and monetary policy planners do more than recognize that ‘politics matters’ for stability, and pay adequate attention to factoring political realities into their theories and models.Less
This chapter seeks to analyse prospects for the Euro‐zone's stability in terms of comparative history and economic theory. It begins by comparing the Euro‐zone with earlier examples of national currency unification, and with the Bretton Woods system, focusing, in particular, on the formative experiences of the 20‐year period of the European Monetary System (EMS). The chapter goes on to discuss the meaning and sources of stability in economic theory, especially optimum currency area theory, neo‐liberal theory about labour markets, credibility theory, and ‘regulation’ theory. Particular attention is paid to the weaknesses of these theories in dealing with the crucial political dimension of Euro‐zone stability. It will be important for Euro‐zone stability that ECB and monetary policy planners do more than recognize that ‘politics matters’ for stability, and pay adequate attention to factoring political realities into their theories and models.
David Howarth
- Published in print:
- 2002
- Published Online:
- November 2003
- ISBN:
- 9780199250257
- eISBN:
- 9780191599101
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199250251.003.0007
- Subject:
- Political Science, European Union
Examines the contribution of EMU to the Europeanization of the French state, and falls into two parts. First, it examines the discursive and ideological structure underpinning and shaping the impact ...
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Examines the contribution of EMU to the Europeanization of the French state, and falls into two parts. First, it examines the discursive and ideological structure underpinning and shaping the impact of EMU on French state structures, policy regimes and policies. This discursive structure is shaped principally by a conservative liberalism—in the ascendant, given the economic constraints reinforced by monetary integration—and a rearguard interventionism. Second, substantive state reforms and the strategic behaviour of French policy‐makers in the Euro‐zone reflect the dialectic between these two ideologies. This dialectic and the substantive reforms have contributed to reshaping French state identity. The French decision to embrace EMU should also be seen in terms of French strategy to increase monetary policy‐making power in relation to both the Germans and the Americans.Less
Examines the contribution of EMU to the Europeanization of the French state, and falls into two parts. First, it examines the discursive and ideological structure underpinning and shaping the impact of EMU on French state structures, policy regimes and policies. This discursive structure is shaped principally by a conservative liberalism—in the ascendant, given the economic constraints reinforced by monetary integration—and a rearguard interventionism. Second, substantive state reforms and the strategic behaviour of French policy‐makers in the Euro‐zone reflect the dialectic between these two ideologies. This dialectic and the substantive reforms have contributed to reshaping French state identity. The French decision to embrace EMU should also be seen in terms of French strategy to increase monetary policy‐making power in relation to both the Germans and the Americans.
Elie Cohen
- Published in print:
- 2001
- Published Online:
- November 2003
- ISBN:
- 9780199244034
- eISBN:
- 9780191599897
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199244030.003.0002
- Subject:
- Political Science, European Union
It is essentially the conjunction of French and German interests that has produced the euro; a conjunction in which foreign and domestic political interests have been cloaked with an economic ...
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It is essentially the conjunction of French and German interests that has produced the euro; a conjunction in which foreign and domestic political interests have been cloaked with an economic rationale. The argument proceeds in four stages: first, by establishing the nature of the European Central Bank (ECB), and what it implies for the French economy; second, the reasons which drove the French government to support it as a means of crisis avoidance; third, the motivation of the German government to give an earnest display of its good faith with regard to its role in Europe after unification, and to show support for the French objective; fourth, the manner in which the ending of the Deutschmark's dominance in Europe involved the adoption of principles and institutions consonant with the ‘German monetary order’.Less
It is essentially the conjunction of French and German interests that has produced the euro; a conjunction in which foreign and domestic political interests have been cloaked with an economic rationale. The argument proceeds in four stages: first, by establishing the nature of the European Central Bank (ECB), and what it implies for the French economy; second, the reasons which drove the French government to support it as a means of crisis avoidance; third, the motivation of the German government to give an earnest display of its good faith with regard to its role in Europe after unification, and to show support for the French objective; fourth, the manner in which the ending of the Deutschmark's dominance in Europe involved the adoption of principles and institutions consonant with the ‘German monetary order’.
Anthony Garratt, Kevin Lee, M. Hashem Pesaran, and Yongcheol Shin
- Published in print:
- 2006
- Published Online:
- September 2006
- ISBN:
- 9780199296859
- eISBN:
- 9780191603853
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199296855.003.0005
- Subject:
- Economics and Finance, Econometrics
This chapter explores a set of identifying restrictions on the short-run dynamics that might be used to supplement the long-run restrictions if the model is to be used to investigate the effect of ...
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This chapter explores a set of identifying restrictions on the short-run dynamics that might be used to supplement the long-run restrictions if the model is to be used to investigate the effect of economically-meaningful shocks. Particular attention is paid to modelling monetary policy decisions, inflation targeting, the derivation of a base rate reaction function, and the identification of monetary policy shocks.Less
This chapter explores a set of identifying restrictions on the short-run dynamics that might be used to supplement the long-run restrictions if the model is to be used to investigate the effect of economically-meaningful shocks. Particular attention is paid to modelling monetary policy decisions, inflation targeting, the derivation of a base rate reaction function, and the identification of monetary policy shocks.
J. C. R. Dow and I. D. Saville
- Published in print:
- 1990
- Published Online:
- November 2003
- ISBN:
- 9780198283195
- eISBN:
- 9780191596186
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0198283199.001.0001
- Subject:
- Economics and Finance, Macro- and Monetary Economics
This book has been written to work on two levels. On the one hand, it provides a theory of monetary policy, focusing on the role of the central bank in determining and effecting policy. It also ...
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This book has been written to work on two levels. On the one hand, it provides a theory of monetary policy, focusing on the role of the central bank in determining and effecting policy. It also examines the relationship of the central banks to the public and private sectors. Both authors have extensive experience working in the Bank of England, and so are attempting to transfer this experience to the area of economic theory. The theoretical analysis is complemented by an examination of the successes and failures of monetary policy in the UK from the mid‐1960s. As such, the book acts as an important work for students of economics and economic theory, but is also accessible to those involved in policy‐making, journalism, and other interested parties.Less
This book has been written to work on two levels. On the one hand, it provides a theory of monetary policy, focusing on the role of the central bank in determining and effecting policy. It also examines the relationship of the central banks to the public and private sectors. Both authors have extensive experience working in the Bank of England, and so are attempting to transfer this experience to the area of economic theory. The theoretical analysis is complemented by an examination of the successes and failures of monetary policy in the UK from the mid‐1960s. As such, the book acts as an important work for students of economics and economic theory, but is also accessible to those involved in policy‐making, journalism, and other interested parties.
Anthony Garratt, Kevin Lee, M. Hashem Pesaran, and Yongcheol Shin
- Published in print:
- 2006
- Published Online:
- September 2006
- ISBN:
- 9780199296859
- eISBN:
- 9780191603853
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199296855.003.0010
- Subject:
- Economics and Finance, Econometrics
This chapter discusses the dynamic properties of the estimated UK model. It presents generalized and orthogonalized impulse response analyses of the effects of shocks to the UK economy, and considers ...
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This chapter discusses the dynamic properties of the estimated UK model. It presents generalized and orthogonalized impulse response analyses of the effects of shocks to the UK economy, and considers in detail the dynamic effect of identified monetary policy shocks. It also presents a decomposition of the variables in the UK model into trends and cycles.Less
This chapter discusses the dynamic properties of the estimated UK model. It presents generalized and orthogonalized impulse response analyses of the effects of shocks to the UK economy, and considers in detail the dynamic effect of identified monetary policy shocks. It also presents a decomposition of the variables in the UK model into trends and cycles.
Loukas Tsoukalis
- Published in print:
- 2003
- Published Online:
- November 2003
- ISBN:
- 9780199250158
- eISBN:
- 9780191599439
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199250154.003.0019
- Subject:
- Political Science, European Union
This chapter first briefly traces the history of European monetary integration. It then examines: the politics and economics of the Maastricht Treaty and Economic and Monetary Union/European Monetary ...
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This chapter first briefly traces the history of European monetary integration. It then examines: the politics and economics of the Maastricht Treaty and Economic and Monetary Union/European Monetary Union (EMU); the convergence criteria and the transition to the final stage; and the institutional structure provided for in the treaty. It concludes with the main outstanding issues, drawing on the experience of the first two years of life with the euro, and the prospects for the future.Less
This chapter first briefly traces the history of European monetary integration. It then examines: the politics and economics of the Maastricht Treaty and Economic and Monetary Union/European Monetary Union (EMU); the convergence criteria and the transition to the final stage; and the institutional structure provided for in the treaty. It concludes with the main outstanding issues, drawing on the experience of the first two years of life with the euro, and the prospects for the future.
Silvia Fabiani, Claire Suzanne Loupias, Fernando Manuel Monteiro Martins, and Roberto Sabbatini (eds)
- Published in print:
- 2007
- Published Online:
- September 2007
- ISBN:
- 9780195309287
- eISBN:
- 9780199783939
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780195309287.001.0001
- Subject:
- Economics and Finance, Econometrics
Theoretical research undertaken over the last decades showed that the nature of nominal rigidities plays a key role in determining the effects of different shocks on the economy. This research has ...
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Theoretical research undertaken over the last decades showed that the nature of nominal rigidities plays a key role in determining the effects of different shocks on the economy. This research has made clear that a thorough understanding of the extent and causes of the sluggish adjustment of nominal prices is crucial to the design and conduct of monetary policy. This book presents the main results of a research program undertaken by the Eurosystem central banks on price setting decisions by firms in the euro area. Its objective is to deepen our understanding of the behavioral mechanisms driving agents' pricing decisions, adopting a methodological approach—asking firms directly about how they set the price of their output (their pricing strategies) and why (the rationale of these strategies)—that is particularly well suited for the purpose at hand. The book also compares results for the euro area to similar analyses for other countries and summarizes the main findings of studies based on individual quantitative micro data on consumer and producer prices carried out for most euro area countries. Finally, the book explores the monetary policy implications of the main findings.Less
Theoretical research undertaken over the last decades showed that the nature of nominal rigidities plays a key role in determining the effects of different shocks on the economy. This research has made clear that a thorough understanding of the extent and causes of the sluggish adjustment of nominal prices is crucial to the design and conduct of monetary policy. This book presents the main results of a research program undertaken by the Eurosystem central banks on price setting decisions by firms in the euro area. Its objective is to deepen our understanding of the behavioral mechanisms driving agents' pricing decisions, adopting a methodological approach—asking firms directly about how they set the price of their output (their pricing strategies) and why (the rationale of these strategies)—that is particularly well suited for the purpose at hand. The book also compares results for the euro area to similar analyses for other countries and summarizes the main findings of studies based on individual quantitative micro data on consumer and producer prices carried out for most euro area countries. Finally, the book explores the monetary policy implications of the main findings.
Kathleen R. McNamara
- Published in print:
- 2003
- Published Online:
- April 2004
- ISBN:
- 9780199257409
- eISBN:
- 9780191600951
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/019925740X.003.0012
- Subject:
- Political Science, European Union
This is the first of three chapters on salient EU policy innovations and expansion between 2000 and 2002, and it looks at European monetary policy (monetary integration) in light of the introduction ...
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This is the first of three chapters on salient EU policy innovations and expansion between 2000 and 2002, and it looks at European monetary policy (monetary integration) in light of the introduction of the Euro on 1 January 2002. McNamara compares the introduction of the Euro with historical cases of currency unification, and demonstrates why patterns of legal, political, and social authority creation at the supranational level must be taken into account to understand recent developments. The first section of the chapter briefly outlines the history of the Euro and EMU (European Monetary Union), and the second examines the potential for currency to act as an engine of institutional innovation and expansion by reviewing the literature on comparative political development, and generating a template for understanding the specific mechanisms that might link currency creation to political development. The third section situates this theoretical discussion within a historical perspective on monetary and institutional change, and the final section turns to a discussion of the potential future trajectory of the EU, asking whether the similar origins of currency consolidation are likely to produce similar results in terms of broader state‐building effects as described in the comparative political development literature. It is argued that the American historical example suggests the potential paths towards a federal Europe that the introduction of the Euro may portend, most importantly in terms of fiscal capacity.Less
This is the first of three chapters on salient EU policy innovations and expansion between 2000 and 2002, and it looks at European monetary policy (monetary integration) in light of the introduction of the Euro on 1 January 2002. McNamara compares the introduction of the Euro with historical cases of currency unification, and demonstrates why patterns of legal, political, and social authority creation at the supranational level must be taken into account to understand recent developments. The first section of the chapter briefly outlines the history of the Euro and EMU (European Monetary Union), and the second examines the potential for currency to act as an engine of institutional innovation and expansion by reviewing the literature on comparative political development, and generating a template for understanding the specific mechanisms that might link currency creation to political development. The third section situates this theoretical discussion within a historical perspective on monetary and institutional change, and the final section turns to a discussion of the potential future trajectory of the EU, asking whether the similar origins of currency consolidation are likely to produce similar results in terms of broader state‐building effects as described in the comparative political development literature. It is argued that the American historical example suggests the potential paths towards a federal Europe that the introduction of the Euro may portend, most importantly in terms of fiscal capacity.
Brigitte Granville
- Published in print:
- 2013
- Published Online:
- October 2017
- ISBN:
- 9780691145402
- eISBN:
- 9781400846443
- Item type:
- chapter
- Publisher:
- Princeton University Press
- DOI:
- 10.23943/princeton/9780691145402.003.0004
- Subject:
- Business and Management, Finance, Accounting, and Banking
In considering the components of effective monetary policies to control inflation, the previous chapters have highlighted the decisive role played by credibility and shown how credibility can be ...
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In considering the components of effective monetary policies to control inflation, the previous chapters have highlighted the decisive role played by credibility and shown how credibility can be established and enhanced through rules-based policy frameworks and independent agencies to implement such regimes. This chapter examines how the same test of credibility, hence supportive public expectations, must also be passed by fiscal policy. For if this fiscal test is failed, even the best designed monetary policy efforts will be unavailing. It also shows how transparent rule-based inflation targets can facilitate resolution of the most intractable fiscal problems. At the time of writing, such problems were most apparent in several of the countries that use the euro. Attempts to address concerns about their solvency by fiscal tightening were having the counterproductive effect of damaging growth, hence further increasing their debt-to-GDP ratios, and all the while raising the likelihood of a social and political backlash against higher taxes and spending cuts.Less
In considering the components of effective monetary policies to control inflation, the previous chapters have highlighted the decisive role played by credibility and shown how credibility can be established and enhanced through rules-based policy frameworks and independent agencies to implement such regimes. This chapter examines how the same test of credibility, hence supportive public expectations, must also be passed by fiscal policy. For if this fiscal test is failed, even the best designed monetary policy efforts will be unavailing. It also shows how transparent rule-based inflation targets can facilitate resolution of the most intractable fiscal problems. At the time of writing, such problems were most apparent in several of the countries that use the euro. Attempts to address concerns about their solvency by fiscal tightening were having the counterproductive effect of damaging growth, hence further increasing their debt-to-GDP ratios, and all the while raising the likelihood of a social and political backlash against higher taxes and spending cuts.
Wolfgang Wessels and Ingo Linsenmann
- Published in print:
- 2002
- Published Online:
- November 2003
- ISBN:
- 9780199250257
- eISBN:
- 9780191599101
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199250251.003.0003
- Subject:
- Political Science, European Union
Taking the new treaty provisions and subsequent acts as independent variables, this chapter considers the impacts of three sets of significantly different modes of governance— supranational ...
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Taking the new treaty provisions and subsequent acts as independent variables, this chapter considers the impacts of three sets of significantly different modes of governance— supranational policy‐making, ‘hard’ coordination, and ‘soft’ coordination—on domestic actors and institutions in the 15 member states with varying politico‐institutional as well as socioeconomic backgrounds. Following ‘top‐down’ institutionalist approaches, the core assumption is that, the institutional developments on the European level will trigger changes in domestic institutions. However, two alternative scenarios serve as points of reference for examining empirical developments at both European and domestic levels: first, the possibility of common trends towards a vertical and horizontal fusion leading to a ‘gouvernance économique’; second, the emergence of fragmentation trends across policy areas and levels of interaction.Less
Taking the new treaty provisions and subsequent acts as independent variables, this chapter considers the impacts of three sets of significantly different modes of governance— supranational policy‐making, ‘hard’ coordination, and ‘soft’ coordination—on domestic actors and institutions in the 15 member states with varying politico‐institutional as well as socioeconomic backgrounds. Following ‘top‐down’ institutionalist approaches, the core assumption is that, the institutional developments on the European level will trigger changes in domestic institutions. However, two alternative scenarios serve as points of reference for examining empirical developments at both European and domestic levels: first, the possibility of common trends towards a vertical and horizontal fusion leading to a ‘gouvernance économique’; second, the emergence of fragmentation trends across policy areas and levels of interaction.
