energy inflation and house price corrections we analyze empirically the role played by energy inflation as a determinant of downward corrections in house prices using a dataset for 18 oecd economies spanning the last four decades we identify periods of downward house price adjustment and estimate conditional logit models to measure the effect of energy inflation on the probability of these house price corrections after controlling for other relevant macroeconomic variables our results give strong evidence that increases in energy price inflation raise the probability of such corrective periods taking place this phenomenon could be explained by various channels through the adverse effects of energy prices on economic activity and income reducing the demand for housing through the particular impact on construction and operation costs and their effects on the supply and demand of housing through the reaction of monetary policy on inflation withdrawing liquidity and further reducing demand through improving attractiveness of commodity versus housing investment on asset markets or through a lagging impact of common factors on both variables such as economic growth our results contribute to the understanding of the pass through of oil price shocks to financial markets and imply that energy price inflation should serve as a leading indicator for the analysis of macro financial risks

spillovers from the oil sector to the housing market cycle we assess the spillovers from the oil sector to the housing market cycle using quarterly data for 20 net oil exporting and importing industrial countries and employing continuous and discrete time duration models we do not uncover a statistically significant difference in the average duration of booms and normal times in the housing markets of those net oil importers and net oil exporters similarly the degree of exposure to commodity price fluctuations does not seem to significantly affect the housing market cycle however we find that housing booms are shorter when oil prices increase than housing busts when oil prices decrease we also show that the net oil importers are more vulnerable to protracted housing slump episodes than the net oil exporters

intellectual property rights and developing country agriculture abstract theoretical studies indicate that the welfare of the developing countries might either be improved or damaged by the strengthening of their own intellectual property rights net gains through their agricultural sectors will be positive if the payoff from new innovations is sufficiently different as compared to the technology exporting countries scattered evidence supports the hypotheses that agricultural r d is responsive to iprs in developing countries but there is also evidence that developed country technology is sufficiently appropriate for developing countries as to offer substantial free rider gains however without iprs it seems unlikely that the agricultural productivity rates in developing countries can begin to catch up with those in developed country agriculture

do household energy expenditures affect mortgage delinquency rates we postulate a direct role for energy prices in the 2008 financial crisis rising energy prices constrain consumer budgets and thereby raise mortgage delinquency rates this hypothesis is tested by estimating a quarterly cointegrating vector autoregressive cvar model that seeks to quantify the factors that influence the percentage of us mortgages that are 30 to 89 days past due and those that enter foreclosure results identify a long run relationship for the percentage of us mortgages that are 30 to 89 days past due that includes the interest rate on one year adjustable mortgages household expenditures on energy nominal home prices rates of home ownership and the fraction of mortgages 90 days or more past due that enter foreclosure unemployment rates have a short run effect together these variables account for much of the historical variation in the percentage of us mortgages that are 30 to 89 days past due and indicate that the post 2006 rise in this measure of mortgage delinquency is associated with falling home prices an increase in household expenditures on energy and rising unemployment

the impact of us economic variables on bank of canada policy direct and indirect responses abstract the impact of us economic variables on canadian monetary policy is assessed using quarterly data for 1963 88 canadian monetary base growth is regressed upon the least squares predictors of 11 us and canadian variables using a generalized least squares procedure that permits isolation of i direct responses by the monetary authority to its expectations of the us variables and ii indirect responses to past us influences that impact upon the current fitted values of the canadian variables the results reveal significance of both direct and indirect us influences on canadian policy across fixed and floating exchange rate regimes

government deficits and money growth additional empirical evidence is provided concerning the impact of government financing decisions on monetary expansion in the united states for the post world war ii period the budget position of the fiscal authority and the rate of money growth set by the fed are specified as endogenous variables within a system of equations the empirical analysis generates evidence of a policy shift in the 1980s with budget deficits exerting no independent influence on high powered money growth prior to 1981 while after 1981 such a linkage is found to exist copyright 1990 by mit press

testing interest rate parity and rational expectations for canada and the united states the purpose of this paper is to examine the joint hypothesis of interest rate parity and rational expectations for canada and the united states using monthly data two approaches to testing are considered 1 the substitution method and 2 testing the cross equation non linear rational expectations restrictions from solving the interest rate parity equation it is demonstrated that standard application of the substitution method requires the assumption that the interest rate parity equation holds deterministically tests for unit roots in the spot exchange rate and interest rate differentials are also investigated

the transmission of inflation in a small economy an empirical analysis of the influence of us monetary disturbances on canadian inflation 1962 1980 abstract the paper examines the transmission of inflation in canada during 1962 1980 using an empirical methodology which is very flexible in determining the direction of casuality and the shape of distributed lag effects the paper finds that us monetary growth exerted an important effect on canadian inflation during both fixed and flexible exchange rate periods the evidence also shows that canadian monetary growth has remained linked to us monetary growth under the present flexible exchange rate regime

the production of housing services and the derived demand for residential energy most studies of residential energy usage treat energy as a final consumer good this study explicitly considers the production of housing service flows from stocks of real estate and flows of operating inputs and considers the demand for residential energy as a factor input the empirical results based upon analysis of a sample of newly constructed dwellings and their occupants are used to evaluate the effects of energy price changes on the price of housing services and on the demand for housing and real estate thus indicating the extent of residential energy conservation in response to higher prices finally the results are used to analyze federal and state tax subsidies for residential energy conservation

the timing of monetary and price changes and the international transmission of inflation this paper presents a theoretical and empirical investigation into timing relationships between variables within and across industrialized countries the main empirical results of our analysis are 1 domestic monetary expansion appears to lead inflation in the sense that money granger causes prices without feedback contradicting an implication of the monetary approach to the balance of payments 2 hardly any significant timing relationship exists between domestic and foreign rates of inflation during the fixed exchange rate period providing no evidence for a generalized law of one price 3 some sterilization of official reserve inflows was successfully performed by the non reserve central banks except for canada 4 u s interest rates granger cause foreign rates providing evidence of some international transmission via asset markets

international transmission of us macroeconomic policy and the inflation record of western europe abstract the interaction between monetary policy government budget deficits and inflation is examined for the four largest western european economies comprising france italy the united kingdom and west germany in order to assess the possible impact of us macroeconomic policy past us monetary base growth deficits and inflation rates are included in the set of explanatory variables for each of the european countries empirical results for the 1962 2 1985 4 sample period reveal interplay between domestic monetary and fiscal policy to be augmented by a significant impact of the us variables across all four countries in the sample

price and volatility linkages between international reits and oil markets abstract this study analyzes price and volatility transmissions between nineteen real estate investment trusts reits and the oil markets the reits data represents a variety of countries at different stages of their development and the expanded analytical approach includes accounting for structural shifts as gradual processes as opposed to strictly abrupt processes typically assumed in the literature oil prices are found to primarily predict reits prices in mature reits markets but the feedback from reits to oil prices is weak from the perspective of volatility strong evidence of bidirectional transmission in majority of the markets is observed our results are in general robust to a shorter common sample period of the various countries this study further demonstrates the importance of accounting for gradual smooth structural shifts for price transmission analysis

causes of the difficulties in internationalization we study the causes of the difficulties faced by firms when they internationalize in search of new markets we build on the resource based theory to argue that the difficulties in internationalization can be separated into three main sets based on their relationship to advantage loss of advantage provided by resources transferred abroad creation of a disadvantage by resources transferred abroad and lack of complementary resources required to operate abroad in each set we further distinguish difficulties that are specific to a firm from those that are common to a set of firms we argue that only a few of the resulting types of difficulties of internationalization are exclusive to the cross border expansion and propose solutions that address the root cause of each type

innovation accounting for the impact of fluctuations in u s variables on the canadian economy innovation accounting is conducted on a nine variable vector autoregression estimated using u s and canadian monthly data for january 1971 to december 1983 this reveals inter alia a positive impact of the u s interest rate on the canadian rate with the role the exchange rate plays in cushioning this impact being clearly apparent a positive effect of the u s money supply on both u s and canadian interest rates a positive albeit muted response of canadian production to a shock in u s production and a persistent influence of u s prices on production negatively and prices positively in canada are also detected l impact des fluctuations dans les variables americaines sur l eonomie canadienne une analyse utilisant la technique d innovation accounting les auteurs utilisent la technique d innovation accounting dans le cadre d un systeme a neuf variables estime comme autoregression vectorielle a l aide de donnees mensuelles canadiennes et americaines couvrant la periode de janvier 1971 a decembre 1983 cette analyse revl un effet positif de la masse monetaire americaine a la fois sur les taux d interet canadiens et americains une reaction positive mais en sourdine du niveau de production au canada a un choc dans le niveau de production americaine et une influence persistence des niveaux de prix americains sur le niveau de production au canada influence negative ainsi que sur les niveaux de prix canadiens influence positive we should like to thank gordon anderson douglas clarke john kennan john kuszczak angelo melino and stanely winer for a number of helpful discussions earlier versions of the paper were presented at the meetings of the canadian economics association in vancouver in june 1983 at the winter meetings of the econometric society in san francisco in december 1983 and in a session of invited papers at the meetings of the canadian economics association in guelph in june 1984 our discussants jacques raynauld in vancouver thomas doan and stephen king in san francisco and allan gregory in guelph offered many useful comments as too did the members of the money macro workshop at the university of western ontario alan harrison also thanks the economics department at the university of warwick for its hospitality and the social science and humanities research council of canada for financial support canadian journal of economics revue canadienne d economique xviii no 4 november novembre 1985 printed in canada imprime au canada 0008 4085 85 784 98 1 50 canadian economics association this content downloaded from 40 77 167 14 on fri 16 sep 2016 06 02 12 utc all use subject to http about jstor org terms impact of fluctuations in us variables 785

a re examination of the monetary model of exchange market pressure canada 1963 1988 in re evaluating the performance of the girton and roper 1977 two country monetary model of exchange market pressure emp for canada estimates are provided for an extended specification that allows for unrestricted dynamics results show the hypothesized negative effect of domestic credit growth on emp to be supported throughout the relevance both of the dynamics and of the hypothesized unitary tradeoff between exchange rate and international reserve movements for bank of canada policy is demonstrated for the sequence of fixed and floating exchange rate regimes contained in the 1963 1 1988 1 sample

how sensitive are consumer expenditures to retail energy prices abstract there is growing evidence that the primary effect of energy price shocks on the u s economy involves a reduction in consumer spending we quantify the direct effect on real consumption of unanticipated changes in discretionary income shifts in precautionary savings and changes in the operating cost of energy using durables the possibility of asymmetries in the response of real consumption to energy price shocks is also considered we demonstrate that linear models are consistent with the symmetric behavior of real consumption in 1979 when energy prices increased sharply and in 1986 when they fell sharply it is shown that historically energy price shocks have been an important factor in explaining u s real consumption growth but by no means the dominant factor

interrelations between the united states and the united kingdom 1873 1975 abstract this article is an excerpt from a monograph monetary trends in the united states and the united kingdom their relation to income prices and interest rates 1867 1975 that the university of chicago press has scheduled for publication in july 1982 earlier in the monograph we estimate a single demand curve for money for the united states and the united kingdom and also show that velocity in the two countries had parallel movements and that the rates of change of velocity were nearly identical in the two countries for most of the century we cover similar behavior of velocity in the two countries requires in addition to a largely common demand curve similar behavior of the variables affecting the demand for money chapter 7 from which this excerpt is taken begins by examining the interrelations between velocity in the two countries the excerpt though self contained is clearly incomplete note that the basic data are geometric averages of annual data for cycle phases expansions or contractions which average 2 0 years in length for the united states 2 8 years for the united kingdom rates of change g with a subscript for the variable for a phase are the slopes of straight lines fitted to the logarithms of three successive phase averages the phase in question the prior phase and the following phase money refers to currency plus adjusted demand and time deposits of commercial banks held by the public income refers to net national product nominal money m or income y is income in dollars or pounds at current prices prices p refer to the implicit price index obtained by dividing national product in current prices by national product in constant 1929 prices velocity v is the ratio of nominal income to nominal money short term interest rates refer to the us commercial paper rate and the uk rate on 3 month bank bills demand shift and postwar readjustment effects refer to the values of dummy variables in the demand curves for each country these effects allow for an upward shift in the demand for money during selected phases of economic uncertainty and for readjustments in the demand for money following world wars i and ii

the economic effects of energy price shocks large fluctuations in energy prices have been a distinguishing characteristic of the u s economy since the 1970s turmoil in the middle east rising energy prices in the u s and evidence of global warming recently have reignited interest in the link between energy prices and economic performance this paper addresses a number of the key issues in this debate what are energy price shocks and where do they come from how responsive is energy demand to changes in energy prices how do consumers expenditure patterns evolve in response to energy price shocks how do energy price shocks affect u s real output inflation and stock prices why do energy price increases seem to cause recessions but energy price decreases do not seem to cause expansions why has there been a surge in the price of oil in recent years why has this new energy price shock not caused a recession so far have the effects of energy price shocks waned since the 1980s and if so why as the paper demonstrates it is critical to account for the endogeneity of energy prices and to differentiate between the effects of demand and supply shocks in energy markets when answering these questions

diffusion of knowledge based products applications to developing economies demand for a knowledge based product often must be created by the product s innovator but the process which diffuses knowledge and so enhances demand accelerates decay of the company s ability to appropriate benefits generated both by the product and by the company s complementary explanation of its qualities and uses decay of the ability to appropriate profit arises from a pervasive free rider problem rivals as well as users become educated by the innovator as the market deepens and expands entry will become feasible for firms capable of production but incapable of supplying effective educational packages at least two principal themes emerge i logically innovative products will be sold bundled with education and other complementary services at least in their early stages ii intensity of diffusion will be sensitive to the nature of governing property rights regimes the analysis suggests that because of free rider and other problems an innovator often finds initial product development plans unproductive and must resort to alternatives feasible diffusion often requires that the product space allocated to an innovator by grants of property rights be larger contain more dimensions than one confined to primary invention s

deficits politics and money growth the authors examine the linkage between federal deficits and money growth by allowing the fed s resp onse to any given deficit to vary systematically according to how the deficit is generated and the party affiliation of the current presid ent in equations for m1 and monetary base growth the structural def icit is consistently significant and invariant across political chang es while the cyclical component of the deficit or a direct measure of the business cycle is significant only during the tenure of democ ratic presidents copyright 1987 by oxford university press

further evidence on the relationship between federal government debt and inflation does an increase in the federal debt cause inflation dwyer 1982 using a par value measure of debt finds no support for such a causal link cox 1985 using a market value measure finds evidence that increases in debt produce higher inflation rates we reconcile these results by demonstrating that failure to capture the interest rate effects inherent in the market value measure accounts for the finding that debt causes inflation incorporating interest rates into our test equations using the market value series leads us to conclude that like the par value series results increases in federal debt do not cause higher rates of inflation

interaction between central bank behaviour and fiscal policy the us case federal reserve behaviour is analysed using a model which incorporates an effect an effect of iscal pressure on monetary policy formulation incentive structures are hypothesized to be such that the central bank plans over a longer horizan than that relevant to the administration with the cyclically adjusted deficit proxying for fiscal pressure from the administration the response to the deficit then plays an interactive role in affecting the trade off weights applied to the competing goals of monetary policy the model performs well for the usa and provides a pattern of policy that is stable over the full 1961ndash 83 period