employment and output effects of observed and unobserved monetary growth the purpose of this paper is to present new evidence on the business cycle effects of contemporaneously observed and unobserved money growth the analysis builds on previous work in two ways first and most important in this paper the output and employment effects of unobserved money growth are estimated without maintained hypotheses about other sources of monetary nonneutrality this approach seems appropriate because the relation between money and business cycles is acknowledged to be not well understood for example see the discussion in grossman 1983 and barro 1984 earlier findings of neutral unobserved money growth involved test procedures that maintained either the neutrality of anticipated money growth barro and hercowitz 1980 or the neutrality of observed money growth boschen and grossman 1982 however the empirical measurement and neutrality of anticipated money growth are unsettled issues see mishkin 1982 while the empirical tests by boschen and grossman 1982 reject the neutrality of observed money growth since incomplete monetary information is a central aspect of many business cycle theories it is of considerable interest to estimate the economic impact of contemporaneously unobserved money growth without placing undue restnctions on the moneylbusiness cycle relation this approach also makes clear that tests of monetary nonneutrality due to incomplete information involve a comparison of coefficients on observed and unobserved monetary growth rather than simply a finding of positive significant coefficients on unobserved money growth

an econometric investigation of the monetary neutrality and rationality propositions from an international perspective t he combination of the natural rate of unemployment and the rational expectations hypotheses in macroeconomic models results in the now well known conclusion that anticipated short run monetary stabilization policies do not influence real economic variables this policy ineffectiveness proposition has been named the macro rational expectations mre hypothesis by modigliani 1977 as a result the implicit policy prescription is that a price level stabilization policy should be pursued the empirical validity of this conclusion is perhaps the central issue in modern stabilization theory barro 1977 1978 1981 barro and rush 1980 and leiderman 1980 have presented empirical evidence for the united states supporting this proposition however a number of recent studies have claimed that previous empirical results which support the finding that anticipated policy is neutral are flawed corrections of these problems often result in conflicting conclusions see small 1979 gordon 1979 and mishkin 1982 given the important implications of the mre hypothesis it is curious that almost all formal testing has been focused upon the united states while barro has suggested that a cross country study would be useful as far as we know only darby 1980 attempts to test whether anticipated changes in monetary policy are neutral across countries unfortunately his results suffer from problems caused by using generated regressors in addition he makes no attempt to test the individual implications of the mre hypothesis which encompasses the propositions that expectations are rational lad anticipated monetary policy does not matter in this paper we employ the methodology developed by mishkin to test the mre hypothesis in six countries canada germany italy japan the united kingdom and the united states the paper is divided into three major sections and a conclusion section ii briefly reviews mishkin s testing method in section iii the procedure employed to specify the money growth equation is discussed and these equations specified section iv presents and discusses the results of applying the method introduced in section ii in the conclusion the major findings are restated possible limitations discussed and extensions suggested

federal borrowing and short term interest rates this paper is an empirical study of the effects of federal government borrowing on short term interest rates it is often taken for granted that increases in federal borrowing cause higher short term rates but little empirical support exists for this assumption in fact this paper demonstrates that federal borrowing is a relatively unimportant and insignificant determinant of short term rates an implication of this result is that financial crowding out effects of government deficit spending may not be overly large postulates about interest rate behavior are the driving force behind many hypotheses of the crowding out literature however these interest rate effects have received relatively little direct attention in this literature this is surprising since as a general rule the stronger the interest rate effect is the stronger the crowding out effect will be an empirical determination of the size of the deficit spending interest rate effect gives some empirical content to the crowding out controversy in section ii of this paper the relationship between federal borrowing interest rates and crowding out is discussed and a loanable funds model of short term interest rates is developed in section iii the regression model is generated and tested the essential result is that variation in three month treasury bill rates is caused by expected inflation changes in the monetary base and by changes in the level of economic activity there is no statistically significant relation between short term interest rates and federal borrowing in section iv additional regression tests are performed which confirm the results in section iii and the problem of simultaneous equation bias is discussed the final part of the paper is a discussion of some implications of the results reported in sections iii and iv

speculation under unawareness no trade theorems establish that in various trading environments investors who share a common prior will not engage in speculation as long as expected utility bayesian updating and full awareness are imposed we relax the last assumption by allowing for asymmetric unawareness and examine under which conditions speculative behaviour emerges we find that if common knowledge is assumed as in the settings of aumann 1976 and milgrom and stokey 1982 unawareness cannot generate speculation this is not true however in settings where no common knowledge is assumed such as speculation in equilibrium geanakoplos 1989 and betting that is always beneficial morris 1994 unless stronger conditions on awareness are imposed

reforming residential electricity tariff in china block tariffs pricing approach the chinese households that make up approximately a quarter of world households are facing a residential power tariff reform in which a rising block tariff structure will be implemented and this tariff mechanism is widely used around the world the basic principle of the structure is to assign a higher price for higher income consumers with low price elasticity of power demand to capture the non linear effects of price and income on elasticities we set up a translog demand model the empirical findings indicate that the higher income consumers are less sensitive than those with lower income to price changes we further put forward three proposals of chinese residential electricity tariffs compared to a flat tariff the reasonable block tariff structure generates more efficient allocation of cross subsidies better incentives for raising the efficiency of electricity usage and reducing emissions from power generation which also supports the living standards of low income households

on fiscal policy and the stock market this paper provides some empirical evidence on the relationship between aggregate quarterly stock prices and other macro variables including measures of monetary and fiscal policy in canada the results indicate the presence of significant lags in the reaction of stock prices to fiscal policy moves to the extent that a proxy for the fiscal policy effect on required expected return to capital was included in the model such a finding conflicts with the stock market efficiency hypothesis further tests also suggest that anticipated and unanticipated fiscal policy changes have significant lagged relationships with current stock prices the canadian stock market therefore appears to have been inefficient with respect to available information on fiscal policy copyright 1988 by ohio state university press

the state of the federal budget and the state of the economy further evidence simultaneous monetary and fiscal policy reaction functions are derived and estimated for the 1969 2 1984 3 period the results suggest that the reagan administration has abandoned fiscal policy as a stabilization tool furthermore although the average money growth rate declined in the reagan administration variation in the rate of money growth indicates that monetary policy has been used to combat unemployment finally monetary and fiscal policies were not coordinated during this period rather monetary and fiscal policy appear to be set by a nash equilibrium in a non cooperative game in a nash equilibrium the policy chosen by each authority maximizes its payoff given the policy choice of the other authority

expected monetary changes and relative prices a look at evidence from the stock market at the heart of the natural rate theory is the assumption that fully perceived monetary growth is neutral with respect to relative price changes unfortunately there have been few attempts to test this assumption directly because the belief that active contracyclical monetary policies are not superior to friedman s constant growth rule rests upon the assumption that expected monetary changes have neutral relative price effects more evidence is needed on whether such changes are in fact neutral to this end we test the hypothesis that only the unexpected components and not the expected components of monetary changes affect relative price changes by looking at the stock market testing is done on a modification of the well known mean variance capital asset pricing model the capm specifically we modify the capm to allow for differential stock returns depending upon expected and unexpected monetary growth rates section ii explains the basic model used to test for non neutral relative price effects of monetary change section iii deals with the empirical definitions of expected and unexpected money growth section iv discusses the basic data while sections v and vi make neutrality tests of monetary growth using actual expected revisions in expected and unexpected money growths the last part summarizes the paper

the reform of the natural gas industry in the pr of china abstract in light of china s energy revolution reform of the natural gas industry and the acceleration of the natural gas sector development are of strategic significance to ensure china s energy security to optimise the energy consumption structure and to address environmental pollution in recent years the chinese government has introduced numerous policies and developmental plans to speed up natural gas sector reform which have led to considerable progress however china s natural gas industry and reform still encounter many problems and challenges the purpose of this study is to investigate the reform of the natural gas industry in china first the current situation of china s natural gas industry is outlined next four aspects of natural gas industry reform are systematically reviewed natural gas administrative system reform industry structure reform pricing mechanism reform and tax and fee system reform third the major problems and challenges facing further reform of the natural gas industry are analysed in depth finally this study proposes policies and suggestions for china s natural gas sector in the coming future

money and output in latin america some tests of a rational expectations approach abstract this paper deals with the relationship between money and output in sixteen latin american countries making use of the framework of analysis elaborated by robert barro for the united states three closely interrelated hypotheses are tested 1 that the growth of the money supply is predictable in that it differs from a random walk with trend 2 that only the part of money growth which is not predicted will affect real output in the short run and 3 that as lucas has argued the slope of the phillips curve is smaller in size for countries where money and prices are less predictable

unemployment inflation and monetarism a further analysis comment in a recent paper in this review robert van order proposes an interesting simplification of the important model of jerome stein 1974 the purpose of this comment is to correct some errors in van order s analysis to relate his results to stein s later work 1976b c and to analyze the role of these papers in the current debate over the mechanisms and effectiveness of macroeconomic policy for the convenience of the reader and to simplify the necessary references to van order s paper his equations through 7 and relevant notation are reproduced g g actual and expected rates of inflation y real output f indicator of fiscal policy m m nominal and real money supply p w levels of prices and wages v velocity of circulation n growth rate of m x speed of adjustment of expected inflation 9 ratio of bonds to money functions p phillips curve f production function e aggregate demand s aggregate supply r reduced form of e and s van order s equations are as follows

does anticipated aggregate demand policy matter further econometric results a heated debate has arisen over what modigliani has dubbed the macro rational expections mre hypothesis this hypothesis embodies two component hypotheses 1 rational expectations and 2 short run neutrality i e that anticipated changes in aggregate demand will have already been taken into account in economic agents behavior and will thus evoke no output or employment response together these component hypotheses imply that deterministic feedback policy rules will have no effect on business cycle fluctuations the irrelevance of these types of policy rules is inconsistent with much previous macro theorizing as well as with the views of policymakers it is thus an extremely controversial proposition which requires a wide range of empirical research this paper is a sequel to a previous paper by the author that paper developed a methodology for testing the mre hypothesis and found that anticipated money growth does matter to the business cycle this paper extends the analyses to cases where the rate of nominal gnp growth or the inflation rate rather than money growth is the aggregate demand variable the empirical results are also negative on the mre hypothesis and its corresponding policy ineffectiveness proposition this abstract was borrowed from another version of this item

is the dollar high because of large budget deficits abstract it is widely believed that the u s dollar has been high in recent years because of large u s budget deficits using three statistical techniques this paper shows that the belief has no empirical support ricardian equivalence may explain the lack of a positive association between the budget deficit and the dollar s exchange rate

chinese energy investments in europe an analysis of policy drivers and approaches abstract enhancing the understanding of china eu energy relations the article examines chinese energy investments in europe from 2008 to 2015 and analyzes the energy interests and policy approaches underpinning them analysis of this data shows that within the eu 30 chinese investments largely focused on the oil and gas sector especially through the acquisition of company shares chinese energy investments in europe reflect a clear political and commercial strategy that addresses the prc s need to balance supply chain security of fossil fuels environmentally friendlier energy production and use as well as to enhance the market position and energy industrial capabilities of chinese state owned or state supervised energy companies based on a comprehensive set of domestic incentives for international investment the chinese penetration of the european energy sector is embedded within two levels of political cooperation the first level revolves around bilateral investment agreements between china and 27 eu member states on the second level china and the eu have established a variety of formats that guide their energy cooperation the conclusion of the proposed bilateral investment agreement between the prc and the eu would create a uniform investment environment across the continent and facilitate mutual economic benefits for both parties

the state of the federal budget and the state of the economy this paper tests systematic responses of the federal budget to forecasts of inflation and unemployment estimated coefficients from fiscal policy reaction functions are examined to determine whether there are such systematic responses additionally the coefficients of these estimated fiscal policy reaction functions are used to test several hypotheses concerning fiscal policy which have been advanced in the political business cycle and public choice literatures

non stationarities in macro economic time series further evidence and implications two sources of non stationarities in the mean of macro economic time series are investigated the empirical evidence for several countries clearly implies that differencing is to be preferred to the assumption of a deterministic linear time trend this result is somewhat weaker with respect to the analogous choice between seasonal differencing and seasonal dummy variables it is recommended that the time series properties of the variables considered in empirical work be carefully checked because the estimated relationships may heavily depend on the chosen detrending procedure les non stationarites dans ies chroniques macro economiques resultats supplmentaires et implications l auteur examine deux sources de non stationarite dans la mnoyenne des chroniques macroeconomiques les resultats d analyses de donnees pour plusieurs pays montrent clairement qu on doit preferer l usage d un processus de differences finies a l emploi d une tendance lineaire deterministe ce resultat est un peu moins robuste pour ce qui est du choix analogue entre l utilisation de differences saisonnieres par rapport a

inconsistency of economic growth and electricity consumption in china a panel var approach abstract china has the largest electricity system in the world which is undergoing a critical market reform based on the panel data in 2000 to 2016 of china this paper tries to explain theinconsistency between electricity consumption and economic growth for example in 2015 gdp growth rate was close to 6 9 but with only 2 9 growth in electricity consumption however in 2018 a 6 6 growth in gdp required an 8 5 electricity growth the results explain the reasons for inconsistency and identify the key factors we find that the increase in inventory fixed capital and industrial electricity consumption will narrow the gap when economy grows faster than electricity consumption and widen the gap on the contrary heterogeneity exists among regions the model and variables seem most convincing in explaining the situation in the western region which is most similar to the full sample of china feedback effect is also observed between electricity consumption and economic growth in most parts of china by granger test the findings provides suggestions for the policy makers in making power planning in an effort to avoid large power shortage or surplus

policy impacts under rational expectations abstract this paper re examines for the u s the validity of the macro rational expectations mre hypothesis in contrast to most previous studies in this area the paper a considers the potential real effects of both monetary and fiscal policies b allows for possible endogeneity of these policies and c uses a joint non linear estimation methodology to distangle the hypothesis of rationality from that of neutrality the empirical results reject the joint mre hypothesis for both policies the results also indicate that policy non neutrality is the culprit behind such rejection this evidence offers further empirical support for macro rational expectations models where monetary and fiscal policies can due to some rigidities play a key role in stabilizing the real economy

pareto optima and equilibria when preferences are incompletely known an exchange economy in which agents have convex incomplete preferences defined by families of concave utility functions is considered sufficient conditions for the set of efficient allocations and equilibria to coincide with the set of efficient allocations and equilibria that result when each agent has a utility in her family are provided welfare theorems in an incomplete preferences framework therefore hold under these conditions and efficient allocations and equilibria are characterized by first order conditions

trade with heterogeneous prior beliefs and asymmetric information no trade theorems have shown that new information will not lead to trade when agents share the same prior beliefs this paper explores the structure of no trade theorems with heterogeneous prior beliefs it is shown how different notions of efficiency under asymmetric information ex ante interim ex post are related to agents prior beliefs as well as incentive compatible and public versions of those efficiency concepts these efficiency results are used to characterize necessary and sufficient conditions on agents beliefs for no trade theorems in different trading environments

budget deficits money growth and causality further oecd evidence abstract this paper investigates the causal linkage between budget deficits and money growth in seven major oecd countries using multivariate granger causality tests combined with akaike s aic criterion and zellner s iterative seemingly unrelated regressions the accommodation hypothesis that deficits granger cause positive long run changes in money growth is systematically rejected across all countries the reverse hypothesis that money growth granger causes long run changes in deficits is also rejected across countries these results suggest that monetary and fiscal policies are set independently in each of the oecd countries

interim efficient allocations under uncertainty abstract this paper considers an exchange economy under uncertainty with asymmetric information uncertainty is represented by multiple priors and posteriors of agents who have either bewley s incomplete preferences or gilboa schmeidler s maximin expected utility preferences the main results characterize interim efficient allocations under uncertainty that is they provide conditions on the sets of posteriors thus implicitly on the way how agents update the sets of priors for non existence of a trade which makes all agents better off at any realization of private information for agents with the incomplete preferences the condition is necessary and sufficient but for agents with the maximin expected utility preferences the condition is sufficient only a couple of necessary conditions for the latter case are provided

government borrowing and monetary accommodation this paper re examines the relationship between treasury borrowing and monetary growth examined previously with annual data by barro niskanen and hamburger and zwick our analysis based on quarterly data produces evidence of a positive and significant impact of total treasury borrowing upon the growth of the monetary base for the 1954 i 1961 ii and 1961 iii 1974 iv periods but an insignificant coefficient for the barro expenditure variable when the coefficient instability during the 1961 iii 1980 iv period is corrected by a dummy variable technique thy debt coefficient is positive and significant and remains stable for this two decade period

causality analysis and multivariate autoregressive modelling with an application to supermarket sales analysis abstract this paper describes a modelling methodology for multivariate stochastic processes the concept of multiple causality is discussed and a procedure to detect multiple causality is suggested the data of a major canadian supermarket is analyzed and a multivariate autoregressive model for this supermarket is constructed and estimated several empirical findings are reported

energy development in china the need for a coherent policy abstract china the world s third largest consumer of primary energy remains in relative terms a poor developing country ambitious modernization plans exemplified by the goal of quadrupling per capita gnp by the year 2000 will require considerable attention to long range energy planning yet the past developments including the most recent guidelines have been marked by abrupt changes and outright reversals leaving china without any coherent energy policy the most durable strategies which emerged during the late 1970s are the stress on coal as the principal fuel building of mine mouth power plants accelerated construction of large hydro stations massive diffusion of small biogas digesters and widespread energy conservation measures

federal deficits macro stabilization goals and federal reserve behavior the effects of federal deficits on federal reserve behavior as proxied by changes in the growth rate of the monetary base are analyzed in this study multivariate granger causality tests are employed in the analysis the deficit measure that is the focus of the analysis is the change in the real market value of privately held federal debt the tests indicate that the deficit granger causes the monetary base additionally concerns for financial market stability real output and exchange rate movements in the period of floating rates also affect federal reserve behavior

the effect of large government deficits on interest rates and equity returns with the current economic expansion in the united states now beginning its third year the persistence of federal government budget deficits on a historically unprecedented scale has clearly become the chief distinguishing characteristic of this business cycle both economically and politically the budget for the 1978 fiscal year submitted to congress by president reagan acknowledges that after a small improvement in 1984 the 1985 deficit will exceed even the record 208 billion mark posted in the immediate post recession environment of 1983 more important the president s new budget indi cates that even with a strong economy and even after 50 billion of proposed spending cuts the 1985 deficit will show no improvement over 1984

tests of the money neutrality and rationality hypotheses the case of japan 1973 1985 this study examines the macroeconomic rational expectations hypothesis for japan in the period 1973 1985 monthly seasonally unadjusted data and the empirical methodology utilized by frederic s mishkin 1982 are used to test the hypotheses of money neutrality and rationality of expectation formation jointly and separately two alternative methods of inducing stationarity in the output data are employed the tests reject the joint hypothes es of money neutrality and rationality as well as the separate hypothesis of money neutrality the separate hypothesis of rationality cannot be rejected copyright 1986 by ohio state university press

tests of rationality neutrality and market efficiency a monte carlo analysis of alternative test statistics abstract this paper examines the small sample properties of three testing strategies used to analyze the rationality monetary neutrality and market efficiency hypotheses we focus on the original two step barro test of the mre hypothesis formed entirely from ols results a test that employs the correct variance covariance formulae for these two step estimates and mishkin s fimle testing framework each test is examined under likely model respecifications the findings highlight the extensive bias incurred by drawing inferences from simple unadjusted two step estimates and reveal the relative power of all tests in identifying alternatives to the null hypotheses

inflation and government deficits there is a pronounced positive correlation of inflation andgovernment deficits in the united states since world war ii the purpose of this paper is to test the three leading explanationsof this correlation these three explanations are a a deficitincreases prices through a wealth effect b a deficit results inthe federal reserve purchasing debt thus increasing the moneysupply and prices and c expected inflation increases the deficit which is the change in the nominal value of bonds no supportis found for either of the first two hypotheses the results indi cate that expected government deficits have no significance forfuture inflation since world war ii the united states has experienced large federal government deficits and a sustained peacetime inflation three differentconnections between the deficits and inflation are prominent in theliterature the most direct connection between government deficits and inflationis that by increasing the real value of outstanding bonds and perceived netwealth a deficit can raise total spending and the price level this connec tion is also the most long standing and is suggested by metzler 1951 andpatinkin 1965 for example monetarists generally and buchanan and wagner 1977 in particularhave emphasized a different link between deficits and inflation they sug gest that the federal reserve purchases government bonds when the trea sury sells bonds thus increasing high powered money the money supply and the price level the federal reserve might behave this way for exam ple because it is attempting to hold down interest rates on governmentsecurities when deficits occur recently barro 1978 1979 has put forward a hypothesis that deficitsare a result of inflation rather than inflation being a result of deficits thegovernment deficit is the change in the nominal value of outstanding gov ernment bonds if the anticipated inflation rate increases then the nomi nal value of bonds must increase i e the government will run a deficit tokeep the same anticipated real amount of bonds all three of these possible connections between government deficitsand inflation are consistent with the observed positive correlation of defi cits and inflation the implications however are strikingly different con

autoregressive modelling and money income causality detection abstract a step wise procedure based on granger s concept of causality and abaike s final prediction error criterion is suggested as a practical means to identify the order of lags of each variable in a multivariate autoregressive process the model seems useful because it can serve as a reduced form formulation to avoid imposing often spurious or false restrictions of the model it also provides a reasonably powerful test of causality the idea is applied to u s postwar money and income data it is found that between m1 and gnp a bivariate feedback model fits the data best between m2 and gnp a one way causal model from money to income performs better diagnostic checks applied to our model seem to indicate the adequacy of our approach

the measurement and significance of the cyclically adjusted federal budget and debt this paper summarizes new measures of the cyclically adjusted federal budget and federal debt and explores the relationship of these measures of fiscal policy to macroeconomic variables during the last quarter century the first part of the paper discusses the construction of the new measures the second part presents regression evidence suggesting that the cyclically adjusted debt is related to nominal gnp interest rates and the private stock of fixed capital

energy security in china a quantitative analysis and policy implications abstract this study aims to examine how china s energy security has changed over 30 years of reform and the opening period it constructs a 4 as quantitative evaluation framework the availability of energy resources the applicability of technology the acceptability by society and the affordability of energy resources the quantitative results show that china s energy security was at its best during the sixth fyp period 1981 1985 but then deteriorated until it hit higher levels between 1995 and 2005 however it was still lower than the level reached during the sixth fyp period during the eleventh fyp period 2006 2010 the energy security situation deteriorated again differences in policy priority over the study period appear to affect the country s energy security status this study suggests that china needs to develop renewable energy resources on a large scale and pay more attention to emissions control to reverse the downward trend in energy security

government deficits and aggregate demand abstract the evidence presented in this paper indicates that changes in government spending transfers and taxes can have substantial effects on aggregate demand the estimates also indicate that the promise of future social security benefits significantly reduces private saving each the basic implications of the so called ricardian equivalence theorem is contradicted by the data the results are consistent with the more general view of the effects of fiscal actions and fiscal expectations that is described in the paper

interest rates and expected future budget deficits in the united states several recent empirical studies have found no evidence of a positive association between interest rates and current and past budget deficits one possible explanation for this finding is that interest rates are related much more to the expectation of future budget deficits than to current and past budget deficits in this paper i investigate whether this explanation is valid finding no evidence that it is section ii briefly formulates and discusses the hypothesis under consideration stating some of its implications section iii presents the results of regressing the commercial paper rate moody s aaa bond rate and the ex post real commercial paper rate on current and past government spending budget deficits and real money supplies the regressions have been fitted to the entire sample of monthly data spanning the period between june 1908 and march 1984 and to 11

federal deficits and money growth in the united states a vector autoregressive analysis abstract a multivariate var modelling technique is employed in this paper to test for causality between federal deficits and money growth in the united states four alternative causality hypotheses including the common accommodation view are examined in addition to the two policy variables four other related macro variables are included in the empirical analysis namely short term interest rates prices real output and exchange rates the var results consistently reject the accommodation hypothesis and indicate that monetary and fiscal policy actions are set independently in the united states other causality inferences are also obtained and their implications are discussed

on the duality between prior beliefs and trading demands in an abstract model with asymmetric information we show that there is a duality relationship between the prior beliefs and trading demands of bets for any given individual then we aggregate all the agents to obtain a second duality relationship between common prior beliefs and trading possibilities we easily derive from these relationships the no trade theorem and its converse general efficiency results can be obtained moreover our framework is sufficiently general to cover special cases proved previously for example econometrica 62 1994 1327 discussion paper 83 center for rationality and interactive decision theory the hebrew university of jerusalem 1995 j econom theory 91 2000 127 gameseconom behav 24 1998 172 yet our argumentsare both simple and intuitive r 2003 published by elsevier science usa

are money growth and inflation related to government deficits evidence from ten industrialized economies abstract we present empirical evidence on the relation between the government debt growth money growth and inflation for ten industrialized countries over the post world war ii period non parametric and parametric tests reveal little evidence that government debt growth is either related to money growth or permanently related to inflation over periods of a decade or less but the level of debt is significantly associated with subsequent inflation from 1974 to 1983 these results are consistent with the hypothesis that central banks in developed economies can conduct independent monetary policy over long periods notwithstanding government deficits

the possibility of speculative trade between dynamically consistent agents it is shown that interim dynamically consistent trade may be supported among agents who have resolute non consequential choice preferences

the impact of energy price uncertainty on macroeconomic variables abstract this paper evaluates the macroeconomic implications of energy price volatility through the lens of a dynamic stochastic general equilibrium dsge model in an open economy the model develops a small open economy in which households consume energy products and firms use energy as productivity inputs where the country is so small that it needs to import energy the price of which is determined abroad whereas positive energy price shocks cause an economic slowdown due to higher costs for consumers and firms energy price volatility shocks generate an increase in gdp in the short run and a reversal in the long run these findings are empirically supported by estimates from a panel var model applied to 10 asian economies where energy price volatility has a positive impact on gdp in the short run moreover the paper finds that increasing demand or supply uncertainty also affect energy prices with amplified fluctuations relative to a model that abstracts from energy market volatility leads households to cut consumption for precautionary savings motives which in turn increases investment both energy price and uncertainty fluctuation lead to high macroeconomic volatility in the business cycle policy makers should encourage investment in energy security and renewable energy such that households and firms would become less responding to fluctuations in the non renewable energy market

unexpected money and unemployment 1920 to 1983 in a series of papers barro 1977 1978 barro and rush 1980 vittorio and tanner 1983 bellante morrell and zardkoohi 1982 and others have tested the rational expectations hypothesis that only unexpected changes in the money supply affect real variables mishkin 1982 merrick 1983 sheehey 1984 small 1979 and others have criticized this work for various reasons none of the cnticisms however has addressed the question of possible endogeneity of the money supply m1 used moreover most of this literature uses only data from after world war ii this paper builds on the previous literature in several directions first it differs from most other work by following blejar and fernandez 1980 and rush 1985 in using the base money supply as the monetary aggregate this controls for the possible endogeneity of the m1 money supply typically used by other researchers moreover it allows the sample period to be extended through 1983 without worrying how the recently changing definitions of m1 affect any results next a longer sample period roughly from 1920 to 1983 is used this time span is interesting for a couple of reasons it allows an assessment of the role played by

shaping china s energy security the impact of domestic reforms this paper is a subsequent study of china s energy security situation which concludes that china s energy security has not improved over 30 years of economic reform the objective of the study is to explore qualitatively why the energy security situation has not improved to answer the why question the study opens up a new perspective by analyzing the relationship between energy security and energy policies from the macroeconomic reform perspective this study discusses major reforms that took place over 30 years it is found that china s macroeconomic reform has restricted the formation of china s energy policies and determined its energy security situation in essence china s energy policies are only a reaction to the macroeconomic measures in other words china s energy policies are not originally intended to improve energy security but passive reactions to china s macroeconomic reform this explains why china did not improve its energy security situation despite 30 years of reform

does anticipated monetary policy matter an econometric investigation a heated debate has arisen over the policy ineffectiveness proposition associate with the work of lucas sargent and wallace it postulates that anticipated aggregate demand policy will have no effect on business cycle fluctuations so that one deterministic feedback policy rule is as good as any other from the point of view of stabilizing the economy this paper develops a methodology for empirically analyzing rational expectations models displaying this neutrality result and then applies it to the important question of whether anticipated monetary policy matters to the business cycle

deficits and money growth in the united states 1872 1983 abstract this paper reports empirical evidence on the relation between government budget deficits and the growth of high powered money in the united states high powered money growth appears to be positively related to war spending during periods when such spending is a substantial fraction of gnp there is little evidence that the growth of high powered money is related to the non war government deficit measured either in cash or in real terms after controlling for the level of overall economic activity

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

the role of local private participation in china s transition to domestically developed renewable energy technologies china s hunger for energy has over the last two decades afforded opportunities to investors from hong kong and foreign countries to provide both the energy technologies china needs as well as project management capabilities to deliver energy projects recently however china has shown itself to be less reliant on non local expertise with an emerging capacity to go it alone in developing sources of energy data from the world bank private participation in infrastructure ppi database was used to analyse this trend and to identify strategic directions that may be evident in china s emerging energy self reliance a total of 555 cases were extracted for analysis using standard statistical tests across the range of available energy technologies while it was found that the involvement of hong kong and foreign companies remains significant overall there is a clear trend in chinese mainland firms targeting and overtaking non local counterparts in the development of renewable energy technologies and projects strong associations were identified between the rise in renewable projects and the growth in the participation of local companies in the energy sector this is a significant finding and it provides strong implications that chinese firms have emerged as an important competitor in renewable energy provision