exchange arrangements entering the twenty first century which anchor will hold this article provides a comprehensive history of anchor or reference currencies exchange rate arrangements and a new measure of foreign exchange restrictions for 194 countries and territories over 1946 2016 we find that the often cited post bretton woods transition from fixed to flexible arrangements is overstated regimes with limited flexibility remain in the majority even if central bankers communications jargon has evolved considerably in recent decades it is apparent that many still place a large implicit weight on the exchange rate the u s dollar scores as the world s dominant anchor currency by a very large margin by some metrics its use is far wider today than 70 years ago in contrast the global role of the euro appears to have stalled we argue that in addition to the usual safe assets story the record accumulation of reserves since 2002 may also have to do with many countries desire to stabilize exchange rates in an environment of markedly reduced exchange rate restrictions or more broadly capital controls an important amendment to the conventional portrayal of the macroeconomic trilemma

on sharks trolls and their patent prey unrealistic damage awards and firms strategies of being infringed abstract patent trolls or sharks are patent holding individuals or often small firms who trap r d intensive manufacturers in patent infringement situations in order to receive damage awards for the illegitimate use of their technology while of great concern to management their existence and impact for both corporate decision makers and policy makers remains to be fully analyzed from an academic standpoint in this paper we show why patent sharks can operate profitably why they are of growing concern how manufacturers can forearm themselves against them and which issues policy makers need to address to do so we map international indemnification rules with strategic rationales of small patent holding firms and large manufacturers within a theoretical model our central finding is that the courts unrealistic consideration of the trade offs faced by inadvertent infringers is a central condition for sharks to operate profitably

dual exchange rates in europe and latin america this article uncovers some important empirical regularities surrounding the operation of formal dual exchange rates in europe and latin america in the 1970s and 1980s although there are some parallels between the european and latin american experiences there are also interesting differences in terms of the size and nature of the distortion created by two official exchange rates the response of the distortion to foreign interest rates real commercial exchange rates and domestic budget deficits and the motives for adopting this exchange rate regime empirical work on dual exchange rate regimes is made difficult by the transitory nature of these regimes and by frequent changes in institutional practices

assessing china s exchange rate regime the imf articles of agreement forbid a country from manipulating its currency for unfair advantage the us treasury has been legally required since 1988 to report to congress biannually regarding whether individual trading partners are guilty of manipulation one part of this paper tests econometrically two competing sets of hypothesized determinants of the treasury decisions 1 legitimate economic variables consistent with the imf definition of manipulation the partners overall current account gdp its reserve changes and the real overvaluation of its currency and 2 variables suggestive of domestic american political expediency the bilateral trade balance us unemployment and an election year dummy the econometric results suggest that the treasury verdicts are driven heavily by the us bilateral deficit though other variables also turn out to be quite important in 2005 china announced a switch to a new exchange rate regime the exchange rate would be set with reference to a basket of other currencies with numerical weights unannounced allowing a movement of up to 0 3 within any given day although this step was originally accepted at face value in public policy circles scepticism is in order the second econometric part of the paper evaluates what exchange rate regime china has actually been following we use the technique introduced by frankel and wei 1994 1 one regresses changes in the value of the local currency in this case the rmb against changes in the values of the dollar euro yen and other currencies that may be in the basket we find that within 2005 the de facto regime remained a peg to a basket that put virtually all weight on the dollar subsequently there has been a modest but steady increase in flexibility with some weight shifted to a few non dollar currencies but not those one might expect in any case the weight on the dollar was still fairly heavy in 2006 the paper tests whether the decline in the implicit weight on the dollar is related to the pressure from us officials it also considers whether the increase in flexibility that we have seen small though it is has been gradually accelerating at a rate that would suggest the likelihood of some genuine flexibility in the not so distant future jeffrey a frankel and shang jin wei 1 ref 18

exchange rate pass through in developing and emerging markets a survey of conceptual methodological and policy issues and selected empirical findings abstractglobal integration has increased the international linkages of financial markets for emerging market countries a key channel for the international transmission of inflation and economic cycles is from exchange rate movements to domestic prices known as exchange rate pass through erpt this article reviews the conceptual methodological and policy issues connected with erpt in emerging market and developing countries and critically surveys selected empirical studies a key contribution is to categorise and compare the heterogeneous methodologies used to extract erpt measures in the empirical literature single equation models and systems methods are contrasted frequent misspecifications that produce unreliable erpt estimates are highlighted the discerning policy maker needs to ascertain by which methods erpt measures were calculated the controls and restrictions applied and the time frame and stability of the estimates

the national ecological accounting and auditing scheme as an instrument of institutional reform in china a discourse analysis having been recognised as a resource intensive economy the people s republic of china has been experiencing major implications in terms of ecological environment degradation which continuously harms the health of the chinese people and the productivity of china s economy among the political efforts set forth by the chinese central authorities the claim of promoting a national ecological accounting and auditing scheme neaas has been drawing nationwide attention through a series of critical discourse analysis on relevant written texts produced by the central authorities mainstream media and the chinese academics this paper sets out to analyse the historical evolution of the institutional context in relation to the establishment of such a scheme and further to decipher the ideological underpinnings that have shaped this context the findings indicate that the signification of neaas goes far beyond the environment protection in that this scheme constitutes a fundamental institutional reform that the communist party of china seeks to conduct

central bank transparency and cross border banking abstract we analyze the effect of central bank transparency on cross border bank activities based on a panel gravity model for cross border bank claims for 21 home and 47 destination countries from 1998 to 2010 we find strong empirical evidence that a rise in central bank transparency in the destination country on average increases cross border claims using interaction models we find that the positive effect of central bank transparency on cross border claims is only significant if the central bank is politically independent and operates in a stable economic environment central bank transparency and credibility are thus considered complements by banks investing abroad

real exchange rate volatility financial crises and exchange rate regimes this paper examines real exchange rate rer volatility in eighty countries around the world during the period 1970 to 2011 two main questions are raised are structural breaks in rer volatility related to changes in exchange rate regimes or financial crises and do these two events affect the permanent and transitory components of rer volatility to answer them we employ two complementary procedures that consist in detecting structural breaks in the rer series and decomposing volatility into its permanent and transitory components our results suggest that structural breaks in rer volatility coincidence with financial crises and certain changes in nominal exchange rate regimes moreover our findings confirm that rer volatility does increase with the global financial crises and detect that the more flexible the exchange rate regime the higher the volatility of the rer using a de facto exchange rate classification

global markets for technology evidence from patent transactions abstract the paper analyses the recent evolution of international markets for technology by examining changes in ownership of us granted patents we study the effects of the geographical origin of patents proxied by their first priority country on the probability of patents being traded on the timing of the transaction and on the probability of observing a cross border transaction while controlling for the characteristics of the patents the time and sector specificities the analyses are based on a comprehensive dataset that covers all the patents granted by the uspto over the 2002 2012 period the data from the us patent reassignment database have been cleaned and processed and a subset of 95 542 granted patents that have been traded has been identified we obtain evidence from survival models that there has been an increase in the rate of patent transactions in recent years the obtained results indicate that patents with a first non us original applicant have less probability of being traded and show a longer time to transaction than us first priority patents we also find that more science based patents which are usually characterized by a higher technological uncertainty are more likely to be traded but are much less likely to be involved in cross border deals the results are discussed in light of the impact of asymmetric information and search costs on international patent transactions

what makes growth sustained abstract we identify structural breaks in economic growth in 140 countries and use these to define growth spells periods of high growth preceded by an upbreak and ending either with a downbreak or with the end of the sample growth spells tend to be shorter in african and latin american countries than elsewhere we find evidence that growth duration is positively related to the degree of equality of the income distribution democratic institutions export orientation with higher propensities to export manufactures greater openness to fdi and avoidance of exchange rate overvaluation favorable for duration and macroeconomic stability

testing commitment models of monetary policy evidence from oecd economies in ation rates in a number of oecd follow a common trend over the past four decades in ation starts out low in the 1960s rises for a time before peaking in the 1970s or early 1980s and then falls back to initial levels this similarity in the behavior of trend in ation suggests that any explanation of long run in ation trends ought to apply across oecd countries ireland 1999 shows that a simple time inconsistency model of monetary policy modifled to allow for a time varying nairu can explain long run trends in u s in ation in this paper we show that this result cannot serve as an explanation of the common trend in oecd in ation as it flts the data only in the u s we investigate two important variants of the hypothesis i that time inconsistency was an important component of central bank behavior in earlier decades but has become less signiflcant in recent years and ii that time inconsistency problems drive u s in ation which afiects in ation rates in other countries as a result of central bankers attempts to manage nominal exchange rate movements vis a vis the u s dollar we flnd that the flrst hypothesis flts the data no better than the baseline model we flnd some support for the international spillovers version of the model but the behavior of non u s central bankers with respect to domestic unemployment rates is not well described by the time inconsistency mechanism

drift control of international reserves abstract we develop a model of optimal reserve holdings where the reserve authority controls the upward and downward drift of international reserves and chooses the trigger points that induce changes in drift we argue that this drift control model better describes the dynamic behavior of reserves than does the popular buffer stock model we present an innovative mathematical tool for analyzing the drift control based on martingale stopping theory since the reserve authority has more instruments with drift control than with a buffer stock strategy it can manage reserves at significantly lower cost

market trade in patents and the rise of a class of specialized inventors in the 19th century united states it has long been recognized that one of the original aims of the u s patent system was to stimulate technological development by granting inventors temporary monopoly rights to their discoveries this paper argues that the u s system fostered inventive activity in another important way as well by providing the institutional infrastructure necessary for the growth of a market for technology early 19thcentury inventors often had to play a direct role in the commercial development of their ideas a situation that constrained their ability to focus on the generation of new technologies b zorina khan and sokoloff 1993 the growth of a market in patents not only made invention a more attractive activity by raising retums but also enabled creative individuals to extract income from their ideas by selling them off making it possible for them to specialize in the inventive activities for which they had a comparative advantage ever since adam smith economists have understood that one of the most fundamental processes at work in economic development is the specialization in the use of resources that the growth of market trade makes possible given the importance of the generation of new technologies to economic growth as well as the long standing recognition that investment in invention like other types of investment activity is responsive to material returns the lack of research on the dynamics of these processes for the case of technology is somewhat puzzling the answer may simply be that this topic did not seem very relevant in a world dominated by large scale businesses that integrated both the generation and commercialization of new technologies in recent years however venture capital has flowed to firms that focus on inventive activity and sell off or license the resulting intellectual property to enterprises better positioned to exploit its commercial advantages in other words it now seems that whatever the coordination benefits of conducting these various activities within a single large firm investors are realizing that there are also potential gains to be derived from a division of labor across organizations this specialization of function is not however a modern innovation in organization on the contrary as we will show such a division of labor was commonplace by the late 19th century a period which like the present age was characterized by rapid technological change the institutional foundation for market trade in technology was the u s patent system created in accordance with the commerce clause of the constitution although influenced by british law the framers of the u s system self consciously made a number of important innovations among them were dramatically lower fees impersonal administrative procedures for handling applications and the requirement that a patentee be the first and true inventor anywhere in the world patentees also had to be humans not firms these provisions extended the protection of property rights to a much broader range of inventions than obtained in britain or elsewhere in europe and when coupled with effective enforcement meant that inventors could advantageously reveal information about their ideas to prospective buyers even before they received a patent grant moreover uncertainty about the value of the patents decreased dramatically after the law was reformed in 1836 replacing a registration system which left to civil litigation the resolution of questions of originality novelty and appropriate scope by an examination system in which technically department of economics university of california los angeles 90095 and national bureau of economic research lamoreaux is also affiliated with the department of history at ucla we thank marigee bacolod lisa boehmer yael elad brian rivera ludmila skulkina matthew wiswall and tamara zavaliyenko for research assistance research support was provided by the national science foundation and the ucla academic senate

protecting intellectual property rights are small firms handicapped this paper studies the determinants of patent suits and settlements during 1978 99 by linking information from the u s patent office the federal courts and industry sources we find that litigation risk is much higher for patents that are owned by individuals and firms with small patent portfolios patentees with a large portfolio of patents to trade or other characteristics that facilitate cooperative resolution of disputes are much less likely to prosecute infringement suits however postsuit outcomes do not depend on these characteristics these findings show that small patentees are at a significant disadvantage in protecting their patent rights because their greater litigation risk is not offset by more rapid resolution of their suits our empirical estimates of the heterogeneity in litigation risk can help in developing private patent litigation insurance to mitigate the adverse affects of high enforcement costs

the modern history of exchange rate arrangements a reinterpretation we develop a novel system of reclassifying historical exchange rate regimes one key difference between our study and previous classifications is that we employ monthly data on market determined parallel exchange rates going back to 1946 for 153 countries our approach differs from the imf official classification which we show to be only a little better than random it also differs radically from all previous attempts at historical reclassification our classification points to a rethinking of economic performance under alternative exchange rate regimes indeed the breakup of bretton woods had less impact on exchange rate regimes than is popularly believed

choosing and reneging on exchange rate regimes we use data on announced and actual exchange rate arrangements to ask which countries follow de facto regimes different from their de iure ones that is do not do what they say our results suggest that countries with poor institutional quality have difficulty in maintaining pegging and abandon it often in contrast many countries with relatively good institutions display fear of floating that is they manage more than announced perhaps to signal their differences from those countries incapable of maintaining promises of monetary stability jel f3 o1

r d offshoring and the productivity growth of european regions the recent increase in r d offshoring has raised fears that knowledge and competitiveness in advanced countries may be at risk of hollowing out at the same time economic research has stressed that this process is also likely to allow some reverse technology transfer and foster growth at home this paper addresses this issue by investigating the extent to which r d offshoring is associated with productivity dynamics of european regions we find that offshoring regions have higher productivity growth but this positive effect fades with the number of investment projects carried out abroad a large and positive correlation emerges between the extent of r d offshoring and the home region productivity growth supporting the idea that carrying out r d abroad strengthens european competitiveness

what determines patent value insights from the semiconductor industry abstract this paper contributes to an understanding which impacts certain patent characteristics have on the value of patent rights in an exploratory study 127 individual patents from a semiconductor company were evaluated comprehensively by technical and marketing representatives the analysis of this rare data shows that for patents used as bargaining chips novelty and inventive activity are most important difficulty of inventing around and disclosure turn out to be of limited importance due to a selection bias the influence of patent age on its value cannot be determined the results hint at a differentiated theoretical plausibility of value indicators

monetary policy options for mitigating the impact of the global financial crisis on emerging market economies though the hypothesis that exchange rate regimes fully predetermine monetary policy in the face of external shocks hardly finds any advocates on theoretical ground it has crept in the most of empirical research this study adopts a more discerning empirical approach that looks at monetary policy tools used in order to accommodate the recent financial crisis we investigated the gdp growth in 45 emerging market economies in the most intense phase of the crisis and found out that there is no clear difference in the growth performance between countries at the opposite poles of the exchange rate regime spectrum depreciation cum international reserve depletion outperforms the other policy options especially the rise in the interest rate spread we discovered certain complementarities between the information on the policy option and on exchange rate regime taking into account non gaussian settings we decided to use quantile regression which provide in addition more complete picture of relationship between the covariates and the distribution of the gdp growth

classifying exchange rate regimes deeds vs words abstract most of the empirical literature on exchange rate regimes uses the imf de jure classification based on the regime announced by the governments despite the recognized inconsistencies between reported and actual policies in many cases to address this problem we construct a de facto classification based on data on exchange rates and international reserves from all imf reporting countries over the period 1974 2000 which we believe provides a meaningful alternative for future empirical work on the topic the classification sheds new light on several stylized facts previously reported in the literature in particular we find that the de facto pegs have remained stable throughout the last decade although an increasing number of them shy away from an explicit commitment to a fixed regime hidden pegs we confirm the hollowing out hypothesis but show that it does not apply to countries with limited access to capital markets we also find that pure floats are associated with only relatively minor nominal exchange rate volatility and that the recent increase in the number of de jure floats goes hand in hand with an increase in the number of de facto dirty floats fear of floating

transitions at different moments in time a spatial probit approach this paper adopts a spatial probit approach to explain interaction effects among cross sectional units when the dependent variable takes the form of a binary response variable and transitions from state 0 to 1 occur at different moments in time the model has two spatially lagged variables one for units that are still in state 0 and one for units that had already transferred to state 1 the parameters are estimated on observations for those units that are still in state 0 at the start of the different time periods whereas observations on units after they transferred to state 1 are discarded just as in the literature on duration modeling furthermore neighboring units that had not yet transferred may have a different impact from units that had already transferred we illustrate our approach with an empirical study of the adoption of inflation targeting for a sample of 58 countries over the period 1985 2008 copyright 2016 john wiley sons ltd

ideas for rent an overview of markets for technology this article surveys some of the recent literature on technology markets and summarizes its main issues and insights we structure our analysis in three parts the supply and demand of technology the factors that condition the formation and growth of technology markets industry structure and dynamic issues in addition we summarize some of the studies that have tried to document the size and growth of these markets we find that the literature has focused mainly on the supply of technology but several other aspects of these markets remain under studied including the demand for external technology the role of uncertainty in technology markets and the dynamic interaction between industry structure and the market for technology understanding these will illuminate whether markets for technology will continue to grow or remained confined to pockets of the economy copyright 2010 the author 2010 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

oil shocks and monetary policy rules in emerging economies we examine the effects of shocks in the oil market on key macroeconomic variables in small open economies using a dynamic stochastic general equilibrium model with sticky prices and imperfect competition under different monetary policy rules the numerical solutions show that the types of exchange rate regimes and monetary policies could partly explain the trends in macroeconomic volatilities considering negative shocks to oil supply hamilton 1983 and positive shocks to oil demand kilian 2009 these findings are confirmed in vector autoregressive responses for chile and israel with inflation targeting under flexible exchange regimes and hong kong with fixed regime

characteristics of patent litigation a window on competition we examine the patenting behavior of firms in an industry characterized by rapid technological change and cumulative innovation recent survey evidence suggests that semiconductor firms do not rely heavily on patents to appropriate returns to r d yet the propensity of semiconductor firms to patent has risen dramatically since the mid 1980s we explore this apparent paradox by conducting interviews with industry representatives and analyzing the patenting behavior of 95 u s semiconductor firms during 1979 1995 the results suggest that the 1980s strengthening of u s patent rights spawned patent portfolio races among capital intensive firms but it also facilitated entry by specialized design firms copyright 2001 by the rand corporation

licensing in the theory of innovation this article analyzes licensing in a noncooperative r d game we ask two questions what are the incentives for licensing a production technology and what is the impact of licensing on the pattern of innovation and the consequent evolution of industry costs and market structure the gainsfrom trading information through licensing contracts are achieved through the replacement of inefficient production techniques the ex post incentive and the elimination of inefficient research expenditures the ex ante incentive in a duopoly the availability of licensing encourages research when the firms initial production technologies are close in costs and discourages research when initial costs are asymmetric

political accountability and the room to maneuver a search for a causal chain many studies of the room to maneuver make no provision for popular evaluation of policy they assert rather than demonstrate popular satisfaction with policy choices and macroeconomic outcomes the authors present a framework that explicitly models channels for popular preferences to influence policies and outcomes results for economic policy making in britain do not support the room to maneuver thesis in the authors sample 1981 to 1997 the british government was responsive to changes in political evaluations and its policy choices effectively fed back into popular evaluations of government policy however this accountability mechanism worked outside the real economy shifts in popular evaluations induced changes in policy but had no impact on inflation and economic growth government capacity to shape macroeconomic outcomes was limited and popular influence over economic policy was ineffectual this form of accountability probably existed because british citizens had difficulty gauging the real impacts of their government s policies

impact of licensing on investment and financing of technology development technology innovations continue to be one of the greatest drivers of economic growth realizing the value of such innovations however requires substantial follow on investments in development and commercialization the value of these investments is difficult to capture because of uncertain demand and potential competition this often leads to difficulties in obtaining outside financing for these investments in this paper we explore how licensing contracts can both dissuade other firms from developing alternative technologies and alleviate the financing problem we develop a model in which a firm that invests in the development efforts of an innovation can license its technology to a potential competitor a variety of licensing possibilities is considered including fixed fees royalty schedules and two part licenses consisting of an up front payment and a capped royalty schedule when the firm has no financial constraint a royalty schedule that depends on realized demand dominates a fixed fee per license when investment funds are constrained a royalty cap license with an up front payment can serve as a source of financing we also study the investment problem conditional on the licensing and financing decisions

currency crashes in emerging markets an empirical treatment we use a panel of annual data for over 100 developing countries from 1971 through 1992 to characterize currency crashes we define a currency crash as a large change of the nominal exchange rate that is also a substantial increase in the rate of change of nominal depreciation we examine the composition of the debt as well as its level and a variety of other macroeconomic factors external and foreign crashes tend to occur when output growth is low the growth of domestic credit is high and the level of foreign interest rates are high a low ratio of fdi to debt is consistently associated with a high likelihood of a crash

the dynamics of the transfer and renewal of patents this article explores new data on the transfer and renewal of u s patents and interprets this new evidence using a model of patent transfers and renewal we find that the proportion of transferred patents is large and differs across technology fields and especially type of patentees we also find that the probability of a patent being traded depends on a number of factors the age of the patent the number of citations received by a given age the patent generality and whether the patent has been previously traded or not these findings are consistent with the predictions of a model of patent transfers and renewals

international transmission of u s monetary policy shocks evidence from stock prices this paper analyzes intraday changes in firm level equity prices around interest rate announcements to assess the transmission of u s monetary policy to the global economy we document that foreign firms on average are roughly as sensitive to u s monetary policy as u s firms although we also find considerable cross sectional variation across firms in particular foreign stocks in cyclically sensitive industries show stronger responses to interest rate surprises consistent with a demand channel of policy transmission in addition transmission of u s policy appears to be stronger to economies with fixed exchange rates evidence for a credit channel is weaker

job recruitment networks and migration to cities in india abstract economists have focused on job search and supply side explanations for network effects in labour transactions this paper develops and tests an alternative explanation for the high prevalence of network based labour market entry in developing countries in our theoretical framework employers use employee networks as screening and incentive mechanisms to improve the quality of recruitment our framework suggests a negative relationship between network use and the skill intensity of jobs a positive association between economic activity and network use and a negative relationship between network use and pro labour legislation furthermore social identity effects are expected to intensify when compared to information sharing and other network mechanisms using data from an all india employment survey we implement a novel empirical strategy to test these relationships and find support for our demand side explanation

why are companies offshoring innovation the emerging global race for talent this paper empirically studies determinants of decision by companies to offshore innovation activities it uses survey data from the international offshoring research network project to estimate the impact of managerial intentionality past experience and environmental factors on the probability of offshoring innovation projects the results show that the emerging shortage of highly skilled science and engineering talent in the us and more generally the need to access qualified personnel are important explanatory factors for offshoring innovation decisions moreover contrary to drivers of many other functions labor arbitrage is less important than other forms of cost savings the paper concludes with a discussion of the changing dynamics underlying offshoring of innovation activities suggesting that companies are entering a global race for talent

exchange rate regimes and inflation only hard pegs make a difference abstract using data from a large sample of developing countries from 1985 to 2001 we confirm that hard pegs currency boards or a shared currency reduce inflation and money growth there is no evidence that soft pegs confer any monetary discipline after other factors are controlled for inflation triggers regime switches under hard pegs monetary growth is unaffected by fiscal deficits or by inflation shocks under soft pegs as under floats increased fiscal deficits and positive inflation shocks are associated with higher monetary growth the apparently slower per capita output growth under hard pegs is explained by their geographical distribution jel classification f41

the internationalization of inventive activity a gravity model using patent data this paper discusses the extent and the determinants of the internationalization of european inventive activity between 1990 and 2004 using an innovative method to treat the information contained in the european patent office s patstat database the observed level of internationalization of inventive activities while being rather low has steadily increased over time the amount of collaboration between actors residing in different countries is assessed by means of a gravity model as it is familiar in the literature on international trade the amount of bilateral collaboration is positively affected by the presence of a common language and a common border and by the common participation in the european union participation in the euro zone is also found to have a marginally negative effect international collaboration is negatively affected by distance with estimated elasticities that are significantly smaller than the ones that characterize international trade contrary to the rumors about the death of distance this effect has become stronger in recent years

ride the wild surf an investigation of the drivers of surges in capital inflows over the past 15 years gross inflows to industrial and developing countries have enjoyed a wild ride after reaching record highs in the run up to the global financial crisis they collapsed dramatically in 2008 09 as signs of global recovery reappeared capital inflows resumed although at different speeds the recovery in flows was faster and sharper in developing countries this paper aims at understanding the domestic and external drivers of these surges in gross inflows using quarterly data for 67 countries from 1975 to 2010 it finds that domestic and external factors have significant explanatory power in driving surges of inflows this finding holds for the sample of industrial countries whereas domestic factors play a significantly larger role in explaining surges to developing countries zooming into the findings shows that a financial booms tend to attract massive capital inflows b surges to either industrial or developing countries are driven by regional contagion and c strong growth and natural resource abundance are keys to attract inflows of foreign capital into developing countries

a short history of price level convergence in europe we study the evolution of price level dispersion in europe by combining time series information on harmonized indices of consumer prices hicps with occasional observations of absolute price levels we find that european price levels converged over much of the last 40 to 50 years in the united states our benchmark price level dispersion is more or less stable a back of the envelope calculation suggests that indirect tax rate harmonization convergence of nontraded input costs and convergence of traded input costs in the form of exchange rate stability and increased openness are all important in explaining european price level convergence

do old habits die hard central banks and the bretton woods gold puzzle abstract we assess the importance of individual and institutional experience in shaping macroeconomic policy by studying the persistence of gold standard monetary practices in the bretton woods system using new data from the imf archives we show that although they were not required to countries continued to back currency in circulation with gold the longer an institution spent in the gold standard and the older the policymakers the tighter the link between gold and currency such old habits prevented dollars and gold from working as perfect substitutes and ultimately contributed to the demise of the bretton woods system our findings highlight the persistence of past practices even in the face of radical institutional change and its consequences on the international monetary system

trust and the market for technology abstract conditional on the decision to enter the market for immature technology we test for the effects that trust proxied by the context in which the negotiating parties first met has on the likelihood that these negotiations are successful using survey responses from 860 university firm and firm firm technology transactions we find that trust matters parties with high levels of trust i e know each other from a previous business are between 6 and 23 per cent more likely to conclude a transaction compared with those with low levels of trust i e cold callers we also find that patents can effectively substitute for a lack of trust and that trust is more important in upstream stages basic or applied science

the exchange rate interest differential relationship in six east asian countries abstract this study shows that the real exchange rate real interest differential relation in six east asian economies changes with the nominal regime positive time varying correlations characterize the relation during pegged regimes correlations are negative during freely falling regimes

licensing the market for technology abstract in technology based industries incumbent firms often license their technology to potential competitors such a strategy is difficult to explain within traditional models of licensing this paper extends the literature on licensing by relaxing the assumption of a monopolist technology holder competition in the market for technology induces licensing of innovations and incumbent firms may find it privately profitable to license although their joint profits may well be higher in the absence of any licensing a strong testable implication of our model is that the number of licenses per patent holder decreases with the degree of product differentiation

a retrospective on the bretton woods system lessons for international monetary reform at the close of the second world war when industrialized nations faced serious trade and financial imbalances delegates from forty four countries met in bretton woods new hampshire in order to reconstruct the international monetary system over the next 25 years with currencies fixed to the american dollar world trade expanded vigorously inflation remained moderate and national income in industrialized countries rose faster than during any other period in this volume three generations of scholars and policy makers some of whom participated in the 1944 conference consider how the bretton woods system contributed to economic stability and rapid growth between 1945 and 1971 and discuss the future of the international monetary system in light of the bretton woods experience since president richard m nixon ended the bretton woods system in 1971 exchange rates have exhibited increasing flexibility after twenty years of floating rates however there is considerable interest in once again limiting exchange rate flexibility the apparent success of the european monetary system a fixed rate arrangement loosely based on the postwar system and the prospect of european monetary unification increase interest in a new internationally stable exchange rate moreover some academics and government officials see fixed rates as a way to help eastern europe and the former soviet union cope with pressing economic and political problems the economists historians political scientists and policy makers who contribute to this volume relate the bretton woods system to earlier fixed rate schemes and consider the political background of the original new hampshire meeting using recenteconomic theory for example work on time consistency and credibility they explore adjustment liquidity and transmission under the system the way it affected developing countries and the role of the international monetary fund in maintaining a stable rate the authors examine th

does inflation targeting make a difference in developing countries we evaluate the treatment effect of inflation targeting in thirteen developing countries that have adopted this policy by the end of 2004 using a variety of propensity score matching methods we show that on average inflation targeting has large and significant effects on lowering both inflation and inflation variability in these thirteen countries however the effectiveness of inflation targeting on lowering inflation is found to be quite heterogeneous the performance of a given inflation targeting regime can be affected by country characteristics such as government s fiscal position central bank s desire to limit the movements of exchange rate its willingness to meet the preconditions of policy adoption and the time length since the policy adoption

regional heterogeneity in the relationship between fiscal imbalances and foreign exchange market pressure summary the relationship between fiscal imbalances and other macroeconomic variables is complex and multifaceted however it remains important to understand it not least in order to facilitate the design of appropriate policy one central issue is whether the relationship varies across countries or groups of countries if it does an implication is that policy will also have to be differentiated this paper empirically explores the relationship between fiscal imbalances and pressures in the foreign exchange fx market in latin america caribbean lac and east asia the pacific eap regions using panel data over 1970 2000 it finds that fiscal imbalances have a significant effect on fx pressures in lac but not in eap

does inflation targeting really make a difference evaluating the treatment effect of inflation targeting in seven industrial countries abstract we evaluate the treatment effect of inflation targeting in seven industrial countries that adopted this policy in the 1990s to address the self selection problem of policy adoption we make use of a variety of propensity score matching methods recently developed in the treatment effect literature our results show that inflation targeting has no significant effects on either inflation or inflation variability in these seven countries further evidence from long term nominal interest rates and income velocity of money also supports the window dressing view of inflation targeting

the real exchange rate and economic growth revisiting the case using external instruments abstract we investigate the impact of movements in the real exchange rate on economic growth based on five year average data for a panel of over 150 countries in the post bretton woods period unlike previous literature we use external instruments to deal with possible reverse causality from growth to the real exchange rate our country specific instruments are i global capital flows interacted with individual countries financial openness and ii the growth rate of official reserves we find that a real appreciation depreciation reduces raises significantly annual real gdp growth more than in previous estimates in the literature however our results confirm this effect only for developing countries and for pegs

the international credit channel of u s monetary policy transmission to developing countries evidence from trade data abstract in a large sector level bilateral trade dataset we find robust evidence supporting a broad international credit channel of u s monetary policy transmission to developing countries we show that u s monetary policy has a significant effect on the sectoral composition of developing countries exports financially more vulnerable sectors have a significantly more negative exposure of their trade to a tight u s monetary policy especially in financially less developed exporting countries or during significant u s tightening periods moreover we identify both a monetary policy dependence mechanism and a financial dollarization mechanism through which u s monetary policy can influence the sectoral composition of developing countries exports

the long run relation between black market and official exchange rates evidence from panel cointegration abstract due to the lack of long time series data on black market exchange rates previous research investigated the relation between black market and official exchange rates only for a couple of countries in this paper we employ time series annual data over the 1973 1990 period from 49 countries as well as panel cointegration techniques to show that the black market and official exchange rates do have a long run relationship the implication is that any foreign exchange or direct controls will have only short run effects on the official rate in the long run the official rate will adjust toward the black market rate

testing patent value indicators on directly observed patent value an empirical analysis of ocean tomo patent auctions the valuation of patents is an important albeit challenging task extant research to identify patent value indicators has so far relied on expert estimates of patent value exploited patent renewal data or depended on more indirect measures of patent value recently specialized market places for patent transactions have emerged that allow us for the first time to directly observe patent s private value one of the most prominent market places for patents is ocean tomo a platform that offers periodical patent auctions we make use of this auction data to empirically test predictions on patent value identifiers on real world auction prices we find empirical support for forward citations and the patent s family size however both indicators explain only a small variance in patent value in contrast our full model explains a large share of variance making us optimistic that with increased directly observed patent value such models can be useful tools in patent valuation

the impact of monetary policy on the exchange rate a high frequency exchange rate puzzle in emerging economies abstract this study investigates the impact of monetary policy shocks on the exchange rates of brazil mexico and chile we find that even a focus on 1 day exchange rate changes following policy events which reduces the potential for reverse causality considerably fails to lend support for the view that associates unexpected interest rate hikes with immediate appreciations this lack of empirical backing for the predictions of standard open economy models persists irrespective of whether we use the us dollar or effective exchange rates whether changes in the policy rate that were followed by exchange rate interventions are excluded whether contaminated events are dropped from the analysis or whether we allow for non linearities we argue that it is difficult to attribute this stronger version of the exchange rate puzzle to fiscal dominance as unexpected rate increases are not associated with increases in risk premia and similar results are obtained in the case of chile a country that has had the highest possible short term credit rating since 1995 and a debt gdp ratio below 10

does the exchange rate regime influence the relationship between the output gap and the current account estimates of the output gap are useful for identifying the sustainable level of noninflationary output growth in countries with a flexible exchange rate regime for nations with a fixed exchange rate however domestic prices are inexorably linked to the prices of its main trading partners and are unlikely to bear little relation to the output gap this article uses data on 45 developed and developing countries between 1970 and 2004 to show that a positive output gap in a country with a fixed exchange rate is more liable to be reflected in an imbalance on the external current account

fiscal rules and government borrowing costs international evidence we find that the adoption of numerical fiscal rules reduces government borrowing costs in a sample of 101 advanced and developing countries for 1985 2010 we apply a variety of propensity score matching methods to address the self selection problem of policy adoption and find strong evidence that fiscal rules have large and significant treatment effects on lowering government borrowing costs in both international and domestic financial markets the results are robust to changes in country sample and alternative estimation methodology and are consistent with fiscal rules helping to build policy credibility by reducing the probability of default and the risk premium on government debt that compensates lenders for this possibility jel e43 g12 h60

credit booms and macrofinancial stability this paper explores several questions about credit booms and busts when do credit booms occur when do they end up in busts and when do they not what are the implications for different policies if curbing credit growth and or mitigating the associated risks is an objective we find that credit booms are often associated with financial reform and economic growth they also tend to be more frequent in fixed exchange rate regimes only one in three credit boom episodes are followed by a financial crisis these booms tend to be larger and last longer macroprudential tools have at times proven effective in containing booms and more often in limiting the consequences of busts due to the buffers they helped to build

fertility and the real exchange rate we use a quinquennial data set covering 87 countries between 1975 and 2005 to investigate empirically the relationship between fertility and the real effective exchange rate theoretically a country experiencing a decline in its fertility rate can be expected to experience a real depreciation we test and confirm this hypothesis controlling for a number of other potential determinants we find a statistically significant and robust link between fertility and the exchange rate our point estimate is that a decline in the fertility rate of one child per woman is associated with a depreciation of approximately 15 in the real effective exchange rate on utilise une base de donnees quinquennales pour 87 pays entre 1975 et 2005 afin d etudier empiriquement la relation entre fecondite et taux de change reel effectif theoriquement un pays qui fait l experience d un declin dans le taux de fecondite peut s attendre a une depreciation reelle on teste et on confirme que c est le cas en controlant un certain nombre d autres determinants potentiels il existe une relation significative et robuste entre fecondite et taux de change un declin du taux de fecondite d un enfant par femme est associea une depreciation d a peu pres 15 dans le taux de change reel effectif

the impact of real exchange rate flexibility on east asian exports this paper estimates the impact of intra regiona l real exchange rate flexibility on east asian exports the hypothesis is that t he impact would be negative for east asian countries regardless of their exchange