keynes uncertainty and interest rates uncertainty plays an important role in the general theory particularly in the theory of interest rates keynes did not provide a theory of uncertainty but he did make some enlightening remarks about the direction he thought such a theory should take i argue that some modern innovations in the theory of probability allow us to build a theory which captures these keynesian insights if this is the right theory however uncertainty cannot carry its weight in keynes s arguments this does not mean that the conclusions of these arguments are necessarily mistaken in their best formulation they may succeed with merely an appeal to risk employment was a problem because investment was and investment was problematic because of the uncertainty of its return shapiro 1997 83 keynes clearly saw an important role for uncertainty in his general theory however few contemporaries agreed with him and subsequent keynesians generally obliterated the distinction between risk and uncertainty in part this was caused by keynes s informal presentation of his views on uncertainty in the general theory this paper has two aims the first is to sketch a formal theory of uncertainty which captures keynes s insights about the risk uncertainty distinction i argue that the theory of imprecise probabilities developed in recent years best captures keynes s intuitions about uncertainty in particular this theory provides a formal distinction between risk and uncertainty and allows for an analysis of keynes s weight of arguments however the second aim is to show that if this is right then keynes was wrong to draw the economic consequences of uncertainty that he did in broad terms i argue that uncertainty is economically impotent it only has effects in conjunction with some other feature of models or the world such as missing markets or agent irrationality but these features plus the existence of risk are sufficient to get the conclusions keynes wants these conclusions of keynes might be right but if so they can be justified without reference to keynesian uncertainty at the end of the day uncertainty is not as economically interesting as it appears

post keynesianism meets feminist economics this article explores the relationships between post keynesian economics and feminist economics it distinguishes three key concepts in each tradition that recommend serious attention in the other tradition gender the household and unpaid work and caring as key concepts in feminist economics uncertainty market power and endogenous dynamics as core concepts in post keynesian economics this article will show with reference to the literature in which such cross fertilisation has been explored already how both traditions can be enriched from a stronger mutual engagement

unemployment hysteresis and the natural rate hypothesis i introduction rod cross et al university of st andrews ii reflections on hysteresis and the natural rate 1 the irrelevance of the natural rate lawrence summers harvard university 2 on the history of hysteresis rod cross university of st andrews iii the characteristics of the unemployed 1 unemployment vacancies and the long term unemployed peter smith l b s paul levine south bank polytechnic alan budd l b s 2 characteristics of the long term unemployed evidence from the labour force survey stephen creigh department of employment 3 is unemployment irreversible peter r hughes department of employment gillian hutchinson queen mary college london iv analysis of hysteresis effects 1 union activity and wage employment movements assar lindbeck institute for international studies university of stockholm and dennis snower birkbeck college london 2 a simple model of imperfect competition with walrasian features huw dixon birkbeck college london 3 unemployment and worker quality simon price university of bristol 4 screening in labour markets with heterogeneous workers inge schnell university of bonn and l s e iv hysteresis effects and the explanation of aggregate unemployment 1 testing for multiple natural rates of unemployment in the british economy alan carruth university of kent and andrew oswald centre for labour economics l s e 2 why is wage inflation in britain so high stephen nickell university of oxford 3 phillips curve estimates incorporating a natural rate with hysteresis effects david coe o e c d 4 hysteresis and european unemployment olivier blanchard m i t and lawrence summers harvard university 5 the natural rate empirical fact or theoretical straitjacket tim jenkinson merton college oxford iv panel discussion the implications of hysteresis effects for unemployment policy 1 david stanton employment market research unit department of employment 2 charles adams i m f 3 marcus miller university of warwick 4 peter mcgregor fraser of allander institute university of strathclyde

explaining european union citizens trust in the european central bank in normal and crisis times we study the determinants of trust in the european central bank ecb as measured by the european commission s eurobarometer survey in particular during the global financial crisis and the european sovereign debt crisis we find that the fall in trust in the ecb in crisis times can be rather well explained based on the pre crisis determinants we also show that the fall in trust reflected the macroeconomic deterioration a more generalized fall in the trust in european institutions in the wake of the crisis and the severity of the banking sector s problems to which the ecb was associated in the public opinion

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learning to love globalization education and individual attitudes toward international trade recent studies of public attitudes toward trade have converged on one central finding support for trade restrictions is highest among respondents with the lowest levels of education this has been interpreted as strong support for the stolper samuelson theorem the classic economic treatment of the income effects of trade that predicts that trade openness benefits those owning factors of production with which their economy is relatively well endowed those with skills in the advanced economies while hurting others low skilled workers we reexamine the available survey data showing that the impact of education on attitudes toward trade is almost identical among respondents in the active labor force and those who are not even those who are retired we also find that while individuals with college level educations are far more likely to favor trade openness than others other types of education have no significant effects on attitudes and some actually reduce the support for trade even though they clearly contribute to skill acquisition combined these results strongly suggest that the effects of education on individual trade preferences are not primarily a product of distributional concerns linked to job skills we suggest that exposure to economic ideas and information among college educated individuals plays a key role in shaping attitudes toward trade and globalization this is not to say that distributional issues are not important in shaping attitudes toward trade just that they are not clearly manifest in the simple broad association between education levels and support for free trade the authors would like to thank james alt jeffry frieden robert lawrence dani rodrik ron rogowski ken scheve andy baker peter gourevitch and beth simmons for helpful comments on earlier drafts

post keynesian employment analysis and the macroeconomics of oecd unemployment the post keynesian hereafter pk theory of employment is derived from keynes s chapter 3 1936a the principle of effective demand where labour hire demand is derived from an effective demand point determined in the product markets 1 tobin 1992 p 392 states this chapter is the most important innovation of the general theory the effective demand principle means that there is an employment function keynes 1936a chapter 20 relating alternate labour hire decisions to alternate points of effective demand there is no aggregate demand for labour schedule with the real wage as the independent variable davidson 1983

the timing of partisan and nonpartisan appointments to the central bank some new evidence this paper empirically tests two prevalent but competing theories regarding the timing of appointments to the board of governors by presidential administrations both theories were developed simultaneously in the economics literature by havrilesky and gildea 1992 and waller 1992 and are observationally equivalent by suggesting that administrations will select partisans early in their four year terms and nonpartisans sectoral later in their four year terms although each bases this prediction on a different theoretical model several empirical replications with updated data sets presented here work to confirm the solutions put forth consistently by both models however the results of a new statistical test perhaps lends slightly more credence to the theoretical foundations of waller s bargaining model

do people understand monetary policy abstract we combine questions from the michigan survey about future inflation unemployment and interest rates to investigate whether households are aware of the basic features of u s monetary policy our findings provide evidence that some households form their expectations in a way that is consistent with a taylor 1993 type rule we also document a large degree of variation in the pattern of responses over the business cycle in particular the negative relationship between unemployment and interest rates that is apparent in the data only shows up in households answers during periods of labor market weakness

trust no more the impact of the crisis on citizens trust in central banks abstract citizens trust in economic institutions has generally declined since the onset of the crisis in particular eurobarometer surveys show that trust in the european central bank ecb has fallen significantly during the crisis this paper studies the determinants of public trust in the ecb over the lifetime of the euro net trust in the ecb has decreased significantly in those countries which have experienced increasing sovereign bond yields and financial market turbulence the finding that country specific variables affect citizens trust in the ecb may seem counterintuitive however it is consistent with strong evidence in the political science literature showing that domestic considerations play a significant role when citizens get an opportunity to express their opinion on eu matters

ecosystem service value assessment for constructed wetlands a case study in hangzhou china abstract based on a comprehensive analysis of various classifications of natural resource values we summarized an ecological economic value system of constructed wetland cw ecosystems for treating eutrophic water using the cw located at the hangzhou botanical garden as an example the contingent valuation method cvm and shadow project approach spa were applied to estimate the economic values of cw system ecosystem services the cvm estimated a value of 800 000 yuan yuan chinese currency 7 6 yuan 1 usd as of august 2007 as the total economic value of the cw in a twenty year period meanwhile the spa calculated a value of 23 04 million yuan as the total economic value of the cw in a twenty year period it is determined that compared to the cvm the spa provides a more approximate value of the true monetary value of the hangzhou botanical garden cw this study could fill the gap of knowledge and provide a benchmark when evaluating constructed ecosystem services and help policy makers to promote the development of constructed wetlands in china

what s in a name tony lawson on neoclassical economics and heterodox economics in this article i respond to tony lawson s what is this school called neoclassical economics lawson s paper is provocative because it reformulates neoclassical economics based on veblen s original intent as a mismatch created by recognising the value of an evolutionary approach to the economy whilst remaining over reliant on elements of a taxonomic approach for lawson many heterodox economists may be neoclassical under this description i argue that there is clearly a case to be heard but that the reformulation of the neoclassical raises a number of issues there are issues concerning the specific critique of the current usage of the term neoclassical regarding genealogy and meaning there are specific issues regarding the further development of the new old veblen definition of the neoclassical how clear is the definition in a practical context as a way to identify a neoclassical group based on the commitments of the critique and the definition what does it mean to be more realistic and what is the strategic value of such a provocation for heterodoxy i argue that the combination of these are reasons for more consideration of issues of social ontology not less insofar as the terms of the argument are incomplete and this invites both lawson and those he is criticising to progress the argument particularly on method

the frequency of monetary policy signaling from the administration to the federal reserve note recently this journal published a paper that reported the first hard evidence of direct and systematic administration influence on monetary policy havrilesky 1988a an index was constructed from a simple weekly sum of the number of wall street journal articles that indicated whether the administration desired either easier 1 or tighter 1 monetary policy the index signaling from the administration to the federal reserve or safer was premised on the notion that the financial press efficiently reports the content of the mostly informal exchanges that are occumng between the executive branch and the fed one problem with using this index as a means of continually measuring an administration s influence on monetary policy and whether its signals are heeded regularly or only episodically say as presidential elections approach l is that periodically the level of signaling shifts rather abruptly for example a precipitous drop in signaling occurred after 1984 the yearly average of the absolute value of monthly signals fell by over one half in the 1984 1988 period compared to the 1981 1984 period the break coming in 1985 when the yearly total of the absolute value of monthly signals fell to six as compared to twenty two in 1984 2 unless such shifts can be explained standard reaction function estimation of the causes and consequences of signaling is not feasible across all time periods this paper will attempt to explain these and other changes in signaling over the period from october 1974 to december 1989 using data on the state of the economy and the partisan composition of the federal reserve board of governors except for the welldocumented shift that occurred during the reagan administration it will be as

who wants the euro and why economic explanations of public attitudes towards a single european currency the paper looks at whether public attitudes towards a single european currency held in the european union member states reflect a rational evaluation of the involved benefits and costs it finds that they do the looser monetary and fiscal policy was in the past and the more time a country spent in the ems the more citizens welcome the euro attitudes towards the euro do not seem consistent with attitudes towards a european central bank however upon closer scrutiny opponents of a single currency appear to be less consistent and less rational in their responses than proponents

is a plumber or a new financial architect needed to end global international liquidity problems how one interprets volatility in the international financial markets and therefore chooses a policy stance regarding these markets depend on the underlying economic theory that one explicitly or implicitly utilizes to explain the role of financial markets in a market oriented entrepreneurial economy there are two major alternative theories of financial markets 1 the classical efficient market theory hereafter emt and 2 keynes s liquidity preference theory hereafter lpt each produces a different set of policy prescriptions emt advocates call for a liquidity plumber to patch up some short run stresses in today s efficient international financial flow system lpt proponents believe that the current system is structurally flawed consequently it will require an architect to build a new international financial structure on more solid foundations

the place of portfolio management in the keynesian canon recent publications such as the two volume oxford handbook of post keynesian economics harcourt and kreisler 2013 and the elgar companion to post keynesian economics king 2012 provide authoritative summaries of the current state of the art on a very wide range of relevant topics in particular the contents pages of these books define the field as seen by adherents the obvious implication being that those topics excluded have not yet acquired the necessary status by passing appropriate academic tests of relevance and coherence inter alia the focus of this article portfolio management is on one of these omitted topics starting from the fundamental recognition of uncertainty we examine the whole range of characteristics of the keynesian approach demonstrating the coherence and applicability of its multidimensional nature in the process pointing by contrast to the one dimensional sterility of the conventional approach our general conclusion is that there is a rightful place in the keynesian canon for portfolio management by which we mean not only investment management but also speculative management where these two qualifiers are used in the keynes graham sense

central bank communication and monetary policy a survey of theory and evidence over the last two decades communication has become an increasingly important aspect of monetary policy these real world developments have spawned a huge new scholarly literature on central bank communication mostly empirical and almost all of it written in this decade we survey this ever growing literature the evidence suggests that communication can be an important and powerful part of the central bank s toolkit since it has the ability to move financial markets to enhance the predictability of monetary policy decisions and potentially to help achieve central banks macroeconomic objectives however the large variation in communication strategies across central banks suggests that a consensus has yet to emerge on what constitutes an optimal communication strategy

trust in public institutions over the business cycle this paper explores the link between two coincident events the great recession and the current high levels of mistrust the american people have for public institutions we begin by documenting the recent sharp decline in the con fidence the american public has in their govern ment financial and business sectors and to a lesser extent their media and their courts we are motivated by our own casual empiricism which suggests that widespread mistrust has been an important constraint on policymakers attempt ing to pass expansionary macroeconomic poli cies in the wake of the great recession we then assess whether this decline in trust is a standard cyclical response whether it reflects other fac tors or whether it is due to the specific character of the current downturn yet there is little exist ing literature documenting the cyclically of trust and indeed robert z lawrence 1997 p 132 notes that our understanding of the links between economic performance and trust leaves much to be desired our contribution therefore lies in our demonstration of how trust moves with the business cycle using data on the united states and cross country comparisons

ecological threshold and ecological economic threshold implications from an ecological economic model with adaptation abstract this paper investigates ecological threshold and ecological economic threshold by developing an ecological economic model an extension of a population resource dynamics model developed by brander and taylor 1998 the model reflects three critical issues regarding an ecological economic system system boundary non convexity and adaptation the paper elucidates six main findings ecological economic threshold may come before ecological threshold the ecological economic threshold may exhibit a highly context dependent and dynamic nature which suggests the precautionary principle markets do not respond sufficiently to maintain resiliency under an external shock as prices do not reflect thresholds the system can be restored by intervention even after crossing the ecological economic threshold various transitional paths are possible in restoring the system and adaptation affects resilience to a somewhat significant effect which suggests the importance of better information and education because of the complexity of the model i adopt a system dynamics approach for the development and analysis of the model

information expectations and monetary policy keynes s and friedman s complementary lessons for today this paper considers what lessons there might be for our contemporary monetary consensus in keynes s and friedman s respective policy principles i focus first on the expectations issue for both keynes and friedman monetary policy aims at the stabilisation of expectations and in both cases major issues arise for knowledge and uncertainty although each conceives this in a different manner next i deal with the core of monetary policy principles while keynes s approach is at odds with our modern strategy of inflation targeting friedman would warn us that even in this case interest rate manipulation might not be the appropriate approach the analysis concludes with the issue of interest rate determination the issue of intertemporal coordination and financial stability policy principles are always rooted in theoretical investigation keynes s approach is based upon an analysis of intertemporal coordination failures whereas friedman s policy schemes require that financial markets be made perfectly competitive

bashing and coercion in monetary policy bashing and coercion in monetary policy i introduction we ve got excess plant capacity i don t think that growth is excessive i have not been overly concerned with inflation president bush in a february 14 1989 interview with the wall street journal p a8 with the economy running close to potential the risks seem to be on the side of a further strengthening of price pressure chairman greenspan in testimony before congress on february 21 1989 reprinted from the wall street journal february 22 1989 p a2 many investors appeared to be confused by conflicting statements by bush greenspan and other u s officials wall street journal february 22 1989 p a1 if the fed pushes interest rates significantly higher bush may go public with critism wall street journal march 24 1989 p a1 recent research in macroeconomic policy games by rogoff 1985 alesina 1988 tabellini 1987 and waller 1989a has concentrated on the importance of an independent central bank in a discretionary policymaking environment in the original work on policy games by barro and gordon 1983a 1983b no distinction was made between the monetary authority and the fiscal authority but these researchers argue that because the fiscal authority may have incentives to create excessive inflation giving the powers of money creation to an independent monetary authority whose inflation preferences differ from the current fiscal authority may enable society to reduce the equilibrium inflation rate this results holds even though monetary policy is still chosen in a discretionary fashion therefore backus and driffill 1985a 537 conclude autonomous central banks thus act as a precommitment device which may help to make noninflationary policies more credible and less costly implicit in the term independent is the belief that the central bank is free to choose monetary policy without interference from the fiscal authority administration however this is not generally the case the appointment of central bankers by the legislative or executive branch of the government governmental oversight of policy decisions or political pressure on the central bank by these branches will tend to influence the setting of monetary policy and subsequently the extent to which the central bank is truly independent 1 kane 1984 argues that even if it is not able to directly choose monetary policy the current administration still may be able to achieve its preferred monetary growth path by putting pressure on the monetary authority to do its bidding restricting the powers of the central bank public criticism of central bank performance here after referred to as bashing 2 exclusion from fiscal policy planning which hurts the egos of central bankers or undertaking actions which damage the post central bank income or opportunities of the central bankers are ways he suggests in which the administration can coerce cooperation from the central bank in creating excessive money growth such arguments have given rise to the view that the administration is engaged in a reputation building game with the central bank although the central bank has control of the money supply the administration can threaten to impose a welfare loss by bashing the central bank if it does not generate the monetary policy preferred by the administration the success of this strategy depends on the size of the bashing costs imposed on the central bank and also on the extent to which these threats are credible credibility in turn depends on the benefits and costs incurred by the administration in carrying out its threats as a result the administration may choose to bash the central bank if it does not produce the administration s preferred money inflation outcome by establishing a reputation for bashing the administration may be able to obtain its desired policy outcome in the future

inflation targeting a new framework for monetary policy he world s central bankers and their staffs meet regularly in venues from basle to washington to share ideas and discuss common problems perhaps these frequent meetings help explain why changes in the tactics and strategy of monetary policymaking such as the adoption of money growth targets in the 1970s the intensification of efforts to reduce inflation in the 1980s and the recent push for increased institutional independence for central banks tend to occur in many countries more or less simultaneously whatever their source major changes in the theory and practice of central banking are of great importance for both individual countries and the international economy in this article we discuss a new strategy for monetary policy known as inflation targeting which has sparked much interest and debate among central bankers and monetary economists in recent years this approach is characterized as the name suggests by the announcement of official target ranges for the inflation rate at one or more horizons and by explicit acknowledgment that low and stable inflation is the overriding goal of monetary policy other important features of inflation targeting include increased communication with the public about the plans and objectives of the monetary policymakers and in many cases increased accountability of the central bank

public inflation aversion and the political economy of macroeconomic policymaking do the macroeconomic priorities of citizens differ across countries if so what accounts for this variation and what are its consequences for explanations of the choice of monetary institutions macroeconomic policy and international monetary cooperation this article uses survey data from twenty advanced economies to examine individual preferences about macroeconomic priorities the analysis establishes three key findings first the results suggest that economic context defined by inflation and unemployment performance has a substantial impact on the public s economic objectives in a way that is broadly consistent with the specification of utility loss functions in the theoretical political economy literature second the results suggest that there is significant cross country variation in inflation aversion controlling for economic context third some of this variation is accounted for by national level factors affecting the aggregate costs of inflation and unemployment these results have significant implications for optimal monetary policymaking the explanation of variation in economic outcomes and for accounts of the choice of institutional frameworks for policymaking i thank the bank of england the center for basic research in the social sciences and the institution for social and policy studies for research support and jim alt andrew bailey bill bernhard lawrence broz john freeman jeff frieden jim granato shigeo hirano david lake jeff lax simon price rose razaghian ron rogowski david stasavage gabriel sterne mike tomz jim vreeland the editor and two anonymous reviewers for helpful comments all views expressed are those of the author and do not represent those of the bank of england

economic history and economics i have in the back of my mind a picture of the sort of discipline economics ought to be or at least the sort of discipline i wish it were if economics were practiced in that way there would be nothing problematical about its reciprocal relationship with economic history it would be pretty clear what it is that economic theory offers to economic history and what economic history offers to economic theory i will try to describe what i mean below for better or worse however economics has gone down a different path not the one i have in mind one consequence not the most important one but the one that matters for this discussion is that economic theory learns nothing from economic history and economic history is as much corrupted as enriched by economic theory i will come to that too later on you will notice that i am using strong language i am prepared to admit right away that i may be dead wrong in my judgements but there is no point in pussyfooting bluntness may lead to an interesting discussion after all no one would remember the old german historical school if it were not for the famous methodenstreit actually no one remembers them anyway there must be a lesson in that to get right down to it i suspect that the attempt to construct economics as an axiomatically based hard science is doomed to fail there are many partially overlapping reasons for believing this but since that is not the topic under discussion today i do not have to lay them out in an orderly way i hope the following hodgepodge will convey what i mean a modern economy is a very complicated system since we cannot conduct controlled experiments on its smaller parts or even observe them in isolation the classical hardscience devices for discriminating between competing hypotheses are closed to us the main alternative device is the statistical analysis of historical time series but then another difficulty arises the competing hypotheses are themselves complex and subtle we know before we start that all of them or at least many of them are capable of fitting the data in a gross sort of way then in order to make more refined distinctions we need long time series observed under stationary conditions unfortunately however economics is a social science it is subject to damon runyon s law that nothing between human beings is more than three to one to express the point more formally much of what we observe cannot be treated as the realization of a stationary stochastic process without straining credulity moreover all narrowly economic activity is embedded in a web of social institutions customs beliefs and attitudes concrete outcomes are indubitably affected by these background factors some of which change slowly and gradually others erratically as soon as time series get long enough to offer hope of discriminating among complex hypotheses the likelihood that they remain stationary dwindles away and the noise level gets correspondingly high under these circumstances a little cleverness and persistence can get you almost any result you want i think that is why so few econometricians have ever been forced by the facts to abandon a firmly held belief indeed some of fortune s favorites have been known to write scores of empirical articles without once feeling obliged to report a result that contradicts their prior prejudices if i am anywhere near right about this the interests of scientific economics would be better served by a more modest approach there is enough for us to do without pretending to a degree of completeness and department of economics massachusetts institute of technology cambridge ma 02139

differing preferences between anti inflation and anti unemployment policy among the rich and the poor abstract this paper assesses the preferences of the rich and the poor towards anti inflationary and anti unemployment policy using a consistent cross country social survey i find that the poor are less likely than the rich to prioritize combating inflation rather than unemployment

revisiting the coyne affair a singular event that changed the course of canadian monetary history the coyne affair occurred during the 1959 61 period and led to the resignation of the governor eventually major reforms of the bank of canada act were enacted archival and empirical evidence is used to assess the performance of monetary policy throughout the 1950s in doing so a real time data set is constructed for both canada and the us that permits the estimation of a reaction function i find that while the case against james coyne is not proven there was a brief period when monetary policy was excessively tight and this may well have worsened an already weak economic environment l affaire coyne a eu lieu au cours de la periode 1959 61 et a conduit a la demission du gouverneur de la banque du canada eventuellement des reformes majeures a la loi sur la banque du canada ont ete mises en uvre on utilise des documents d archives et des resultats empiriques pour evaluer la performance de la politique monetaire dans les annees 1950 ce faisant on construit une base de donnees en temps reel pour le canada et les etats unis qui permet de faire l estimation d une fonction de reaction on decouvre que meme si l argumentation developpee contre coyne n est pas prouvee il y a eu une courte periode durant laquelle la politique monetaire a ete excessivement restrictive et que cela peut fort bien avoir entraine la deterioration d une economie deja affaiblie

choice under uncertainty problems solved and unsolved ffifteen years ago the theory of choice under uncertainty could be considered one of the success stories of economic analysis it rested on solid axiomatic foundations it had seen important breakthroughs in the analytics of risk risk aversion and their applications to economic issues and it stood ready to provide the theoretical underpinnings for the newly emerging information revolution in economics 1 today choice under uncertainty is a field in flux the standard theory is being challenged on several grounds from both within and outside economics the nature of these challenges and of our profession s responses to them is the topic of this paper

who supports the ecb evidence from eurobarometer survey data this paper contributes empirically to the long debated issue of the legitimacy of the european central bank ecb with regard to european polities using micro level data from the eurobarometer survey we shed light on the socio demographic determinants of public opinion support for the ecb we find that people with higher level of education and income and centre to right wing political orientation tend to support the ecb as well as people with optimistic expectations on the economic situation by contrast the unemployed tend to distrust the ecb the policy relevance of such results is important for ecb s communication strategy with the general public

modern hyper and high inflations since 1947 hyperinflations by cagan s definition in market economies have been rare much more common have been longer inflationary processes with inflation rates above 100 percent per annum based on a sample of 133 countries and using the 100 percent threshold as the basis for a definition of very high inflation episodes this paper examines the main characteristics of such inflations among other things we find that i close to 20 percent of countries have experienced inflation above 100 percent per annum ii higher inflation tends to be more unstable iii in high inflation countries the relationship between the fiscal balance and seigniorage is strong both in the short and long run iv inflation inertia decreases as average inflation rises v high inflation is associated with poor macroeconomic performance and vi stabilizations from high inflation that rely on the exchange rate as the nominal anchor are expansionary

is it possible that an independent central bank is impossible the case of the australian notes issue board 1920 1924 the history of the australian notes issue board over the period 1920 1924 is presented it is shown that the board was created as a genuinely independent monetary authority but was soon abolished as its policies antagonised interests upon which the government depended the episode illustrates the thesis that the possibility of a genuinely independent monetary authority is problematic

the new institutional economics and the theory of behaviour under uncertainty the new institutional economics nie is diverse in terms of the theory of behaviour under uncertainty some views are close to neoclassical economics but others are similar to those held by heterodox economists distinctions between procedural and substantive uncertainty weak and strong uncertainty and ambiguity and fundamental uncertainty help to identify different approaches to uncertainty in nie regarding the influence of institutions on economics behaviour not all nie focuses on institutions as constraints and takes individuals as given the dominant views of rationality in nie are standard neoclassical maximization and bounded rationality but alternative notions have also been defended

the nature of heterodox economics heterodoxy serves as an umbrella term to cover the coming together of separate projects or traditions in answering the question what distinguishes heterodoxy from the orthodoxy the author argues that matters of ontology are central in answering the question how are the various traditions that make up the modern heterodoxy to be distinguished from each other the author defends criteria other than varying commitments to specific substantive theories policy measures or techniques or basic units of analysis