state and time contingent switches of exchange rate regime abstract recent papers have analysed the effects of britain s return to gold in 1925 one line of argument has been that the return to gold was a state contingent regime switch an alternative view is that it was time contingent this paper shows that these approaches are not mutually exclusive the solution for the exchange rate is derived in a model where a switch to a fixed rate takes place either when a state contingent trigger is reached or at a fixed time whichever is the sooner state contingent and time contingent elements are thus combined within the same model

evaluating the net gains from the cfa franc zone membership a different perspective abstract this paper deals with the membership gains derived by the cfa franc zone member countries after briefly discussing the current institutional framework of the franc zone rules we use the partial pooled reserves methodology developed by dodsworth to compute the net gains derived from cfa franc countries actual data of the operations account were used for the first time for the computation the net membership gains were calculated for both the western african monetary union umoa and the central african cfa franc zone we conclude that when the opportunity costs of maintaining the operations account at the french treasury are taken into consideration especially the interest rate costs and the exchange rate risks the evidence shows that overall there are more net losers than gainers in the cfa franc zone with the 65 reserves pooling for the study period 1975 1988

is the cfa franc zone an optimum currency area summary in this paper we explore the features of the cfa franc zone and compare them to those of the economic and monetary union emu by operationalizing the criteria for an optimum currency area a structural vector autoregression method is used in modeling national outputs as determined by global regional and country specific shocks we find that domestic outputs of the cfa franc zone countries are strongly influenced by country specific shocks while regional shocks are far more important in european countries that have joined the emu the results suggest that the cfa franc zone countries are structurally different from each other and thus are more likely to be subjected to asymmetric shocks they do not appear to form an optimum currency area and the monetary union may have been a costly arrangement for the member countries unless they are compensated with some other benefits

modelling macroeconomic shocks in the cfa franc zone abstract in this paper we modify the method of blanchard and quah american economic review 79 1989 655 in order to estimate a structural var model appropriate for a small open economy in this way we identify shocks to output and prices in the members of the two monetary unions that make up the african cfa franc zone the costs of monetary union membership will depend on the extent to which price and output shocks are correlated across countries and the degree of similarity in the long run effects of the shocks on the macroeconomy the policy conclusions depend on the relative importance of different macroeconomic variables to policymakers and the speed with which a policymaker is able to respond to a shock

exchange rates inflation and the sterilization problem germany 1975 1981 when the goals of internal and external macroeconomic equilibrium are in conflict sterilized intervention in the foreign exchange market may provide an independent policy instrument through which the central bank can resolve its dilemma in the short run this paper is concerned with the west german bundesbank s use of sterilization during the recent years of exchange rate flexibility the paper asks whether the bundesbank pursued sterilization during the years 1995 1981 and whether sterilized foreign exchange intervention exerts a significant influence on the exchange rate in the german case estimation of a stylized bundesbank reaction function suggests an affirmative answer to the first of these questions to assess the efficacy of sterilized intervention a structural portfolio balance model of german asset markets and prices is estimated dynamic perfect foresight simulations of the empirical model are used to ascertain whether imperfect substitutability between foreign and domestic bonds is sufficient to allow the bundesbank to attain independent internal and external goals over the short run of about a month the model s verdict is that the bundesbank has little if any power to influence the exchange rate over that time span without altering current or expected future money market conditions this abstract was borrowed from another version of this item

sources of stagnation in sub saharan africa abstract this paper investigates the sources of economic stagnation in sub saharan africa during the 1970s several policy variables are considered as well as a set of environmental variables which include climate violence export prices and other exogenous factors the paper uses statistical analysis in an attempt to identify the relative importance of the policy variables and the environmental variables taken as groups it also seeks to identify particular policy variables which seem to have been most significant in determining growth outcomes the technique employed for investigation is reduced form econometric estimation in a preliminary analysis the impact of the international trade environment on average economic performance in africa during the period since independence is investigated the results suggest an extremely close relationship between movements in export prices and average performance throughout the 20 year period a second econometric exercise investigates the joint impacts of environmental and policy variables on growth in a cross section of african states since 1970 the spirit of the approach is exploratory and a relatively large number of variables are constructed and tested through multivariate analysis a primary finding is that the environmental variables seem to have had more impact on growth as a group than the policy variables this finding must be qualified however by the continuing lack of some important policy variables agricultural price data have not yet become available in sufficient quantity for cross section analysis nor have several important human resource variables and indices of the use of resources in the public domain among the policy variables which have been used for the analysis those identified with retrenchment during periods of declining commodity prices seem most significant primary among these are the real effective exchange rate and some measures of effectiveness in foreign exchange reallocation during periods when imports must contract severely in the final section of the paper the cross section results are used for a counterfactual analysis of the growth experiences of individual african states measures of growth opportunity cost are constructed which suggest the degree to which errors in management and uncontrollable circumstances have held states below their potential growth paths the results suggest that some success stories may owe much to good luck while some failures may well be due less to bad management than to adverse circumstances

target zones and exchange rate dynamics this paper develops a simple model of exchange rate behavior under a target zone regime it shows that the expectation that monetary policy will be adjusted to limit exchange rate variation affects exchange rate behavior even when the exchange rate lies inside the zone and is thus not being defended actively somewhat surprisingly the analysis of target zones turns out to have a strong formal similarity to problems in option pricing and investment under uncertainty

participating in african monetary unions an alternative evaluation abstract this paper complementary to that of devarajan and de melo deals with the development strategies and performances of 12 franc zone african countries 11 of them gathered in two monetary unions during 1960 1981 beside the actual rate of growth the relative growth performance is considered this performance measured as a residual of a regression on exogenous factors factors independent of economic policy appears to be close to the average performance of other developing countries and better than that of other african countries the results are explained by the direct influence of the foreign exchange regime of the zone and by its impact on economic policy economic policies of individual countries show however some substantial degree of autonomy

external disturbances and the independence of monetary policy under the crawling peg in colombia abstract this study examines the impact of external economic disturbances and the independence of monetary policy in colombia a five equation econometric model is estimated the results indicate that external occurrences have had a significant impact on colombian prices and output contrary to the assumptions of the monetary approach to the balance of payments a substantial portion of foreign reserve flows were sterilized and the short run balance of payments offset to domestic credit expansion was less than complete

fiscal deficits output growth and inflation targets in ghana abstract inflation appears to be the macro problem for which no antidote has been found under the economic recovery programme it is possible that either a wrong diagnosis has been made of the problem or that certain factors within the economy are preventing inflation from staying within target levels using an error correction model ecm the paper estimates an inflation equation for ghana the convenience of this model is in the fact that all the data series exhibit an autoregressive scheme of order one that is they are i 1 series in such an instance the granger engle theorem shows that the ecm provides the most efficient model further the ecm unveils some of the short run dynamics which are missing in other estimation techniques the results of the econometric regression show that inflation in ghana either in the long run or short run is influenced more by output volatility than by monetary factors an examination is made of the consistency of fiscal deficit the hypothesis is that an unsustainable fiscal policy would make government miss some macroeconomic targets it is shown that in 1985 and 1989 fiscal policy was consistent inflation was well within target in 1985 for 1986 1988 the government did not maintain consistent fiscal deficits and inflation in those years was well above targets it is recommended that to control inflation in ghana more attention should be paid to supply factors further government should pursue consistent fiscal policies

price transmission in the international skim milk powder markets abstractthis article investigates the strength and the pattern of spatial price linkages in skimmed milk powder markets using monthly wholesale price data from three major producers and exporters the u s a the e u and oceania and the nonlinear autoregressive distributed lag model the results suggest that prices in the three regions considered are linked with stable long run relationships the law of one price however does not hold the dominant pattern of transmission in the long run is asymmetric involving positive price stocks to be transmitted with higher intensity compared to negative prices shocks asymmetries in price transmission exist in the short run as well

aid and growth in sub saharan africa the recent experience abstract this paper presents some quantitative evidence on the relationship between foreign aid and economic growth in the low income countries of sub saharan africa two key findings are presented first aid is positively and significantly correlated with investment and economic growth in africa second fix capital formation contributed to the rate of growth this result which emerges from analyzing time series data is somewhat surprising given the disappointing performance of african countries since the early 1970s

the balance of payments offset to monetary policy monetarist portfolio balance and keynesian estimates for mexico and venezuela three balance of payments equations are specified and estimated for mexico and venezuela while a large offset is found for venezuela there is no evidence of a significant offset for mexico in the 1970s however it is shown that from 1951 to 1970 the offset was close to minus one suggesting there was structural change in the 1970s the estimated offset for venezuela in the keynesian equation is smaller than that in the monetarist equation supporting arguments that the latter is biased toward minus one however the long run offset is minus one in accord ance with both approaches copyright 1986 by ohio state university press

consumption patterns in sri lanka a decomposition analysis knowing consumer reaction to changes in prices and income is important in formulating microeconomic policies such as public utility prices and commodity taxation this paper analyses the consumpti

import compression and export performance in developing countries the debt crisis that began in 1982 forced a number of developing countries that had relied on external financing into rapid adjustment of their current account positions in many of these countries external adjustment mainly took the form of import reduction or what has been termed import compression to generate trade balance surpluses necessary to service the existing stock of foreign debt while the effects of import compression on consumption and growth have been discussed in the literature there has been little concern expressed with regard to the direct effects such a policy can have on export performance this paper develops a model that takes explicit account of the feedbacks between imports and exports that arise through the effects of imported inputs on exports and the availability of foreign exchange on imports empirical tests of this model for 34 developing countries tend to confirm both these hypotheses these results point clearly for additional foreign financing to reduce the need for import compression and its attendant negative effects on the supply of exports

the rapid rise of china s dairy sector factors behind the growth in demand and supply with the rapid growth in china s dairy industry a number of recent papers have addressed either the supply or the demand trends for dairy products in china none however presents a systematic explanation for the recent growth in both the supply and demand for dairy products the goal of this paper is to sketch a more comprehensive picture of china s dairy sector and to assess the nature of the sector s development in the coming decades drawing upon several empirical studies we examine the trends in dairy product consumption to create a composite picture of the factors underlying the recent growth we also empirically investigate the sources of production gains in milk supply and assess the relative importance of expanding herd size changes in the nature of production technological change and improvements in efficiency to the overall growth of milk production

monetary policy and inflation under the crawling peg some evidence from vars for colombia abstract this paper investigates the effects of monetary policy under the crawling peg in colombia utilizing granger causality tests variance decompositions and impulse response functions from vars several alternative lag selection criteria are used to specify the lag structures of the vars variations in domestic credit appear to affect the balance of payments but not the exchange rate in colombia suggesting that the crawling peg has functioned more like a fixed than a flexible exchange rate the size of the balance of payments offset is relatively large but the models differ on its size domestic credit appears to have a weak effect on national output neither domestic credit nor the exchange rate play much of a role in explaining variation in inflation in colombia inflation appears to be primarily inertial and the result of demand shocks the results are consistent with the recent difficulties encountered in maintaining monetary targets in colombia and the persistence of inflation under contractionary monetary policy

decomposition analysis of consumers demand changes an application to greek consumption data a decomposition analysis for consumer demand functions is developed changes in marshallian demand or expenditure shares functions over time are decomposed into a total substitution effect an income effect and a habit effect this framework is applied to post war greek consumption patterns through a habit persistence version of the quadratic almost ideal demand system quaids it is found that for all commodity categories i e food beverages and tobacco footwear and clothing settling and housing and others the income effect was the main driving force in explaining changes in both quantity demanded and expenditure shares followed by habit and total substitution effects

short run independence of monetary policy under a pegged exchange rates system an econometric approach abstract in this paper we focus on the loss of independence of monetary policy due to the substitutability of domestic and foreign assets and estimate it for seven main industrial countries under a bretton woods period for that we develop a structural model of the economy which includes the behavior of the monetary authorities and we consider three different estimates of independence of monetary policy we find that when exchange rate expectations variables are left out of the equations then the three estimates widely diverge which emphasizes the error we can make if we just consider one type of estimate on the other hand when these variables are introduced in the model the three estimates indicate that a large amount of independence exists

got milk the rapid rise of china s dairy sector and its future prospects this paper synthesizes recent research and new empirical findings to build a more comprehensive understanding of developments in china s dairy sector china s tremendous rise in dairy demand has been driven by several mutually reinforcing factors including rapid income growth promotion by the government and dairy industry changes in urban lifestyles and the development of new more sophisticated marketing channels domestic milk output has grown to satisfy rising demand largely by increasing the dairy herd substantial increases in productivity have been achieved through technology adoption but there is evidence that the torrid growth has created inefficiencies because adaptations to marketing rules infrastructure and institutions have not kept pace with the changing environment these results suggest there is ample room for future growth in both domestic milk production and dairy demand but multinational firms and imported products will likely play and increasing role as china s dairy market continues to develop 2006 elsevier ltd all rights reserved

volatility regime switching in european exchange rates prior to monetary unification abstract several theoretical models suggest that the mere announcement of entering a currency union in the future triggers instantaneous changes in exchange rate volatility first this paper develops a markov switching framework by which in fact volatility regime switching in foreign exchange rates can be detected for all currencies in the run up to the european monetary union emu second the paper attributes the currency specific volatility regime switches to decisive economic institutional and political factors prior to emu all in all the empirical results suggest that for future emu accession countries volatility regime switching models provide a useful tool for a broad range of financial applications e g for the pricing of currency options or for the construction of emu probability calculators

export instability and economic growth in sub saharan africa empirical research on the relationship between export instability and economic growth in less developed countries ldcs has yielded mixed results while some researchers find a negative relationship between export instability and economic growth others find a positive relationship a third group of researchers finds no significant relationship between export instability and economic growth in ldcs 1 those who find a negative relationship between export instability and economic growth in ldcs stress the negative effect export instability has on the supply of output through the generation of uncertainty in long term planning as well as due to shortages of inputs at critical times during the production process those who find a positive relationship between export instability and economic growth argue that ldcs respond to export instability by reducing consumption this process if repeated over a period of time increases savings and hence the rate of investment those who find no significant relationship between export instability and economic growth argue that ldcs are able to anticipate the fluctuations in export earnings and plan for such fluctuations hence instability in export earnings has no appreciable effect on economic growth c moran investigates the relationships between domestic savings rate and economic growth rate on the one hand and export instability on the other in a sample of ldcs 2 he finds that export instability has no significant long run impact on either domestic savings rate or economic growth rate however over relatively short periods of time export instability has a negative and significant effect on both savings and economic growth rate the negative effect occurs when the negative effects of price and of quantity fluctuations reinforce each other on the other hand when the negative effect of price fluctuations is counterbalanced by the effects of quantity fluctuations export instabil

exchange rate dynamics under state contingent stochastic process switching this paper offers a closed form solution of a process switching problem i e switching the exchange rate regime from free floating to a completely fixed one an example of such regime change is the adoption of the euro in contrast to previous studies on the subject this paper analyzes a specific case when foreign exchange market participants consider both the euro locking rate and locking date as uncertain preceding the locking the exchange rate is determined by three factors fundamental market expectations for the euro locking rate and date the model is used to examine the conditions under which the exchange rate volatility is mitigated by the prospect of locking

the real exchange rate and macroeconomic performance in sub saharan africa abstract pooled time series and cross section data for 33 countries in sub saharan africa ssa confirm the negative relationship between the real exchange rate rer misalignment and economic performance economic growth imports exports saving and investment macroeconomic instability also slows growth and other indicators of performance higher levels of misalignment are accompanied by higher levels of macroeconomic instability both lower levels of rer misalignment and instability lead to better economic performance the edwards model of rer determination performs well for the region black market premia tend to show a greater degree of misalignment in rer than alternative measures

trade and payments regime and the balance of payments in ghana abstract by 1982 the ghanaian economy was in the doldrums facing a severe foreign exchange constraint this state of the economy was attributed partly to the trade and exchange rate policies which had created distorsions and disincentives against exporting in particular and production in general since 1983 ghana has for the second time embarked on a trade and payments liberalization program this study examines the effect of the changing trade and payments regime on the balance of payments of ghana it provides some answers as to why the first liberalization episode was not sustained it also contrasts the experience of controlled and liberalized trade regime episodes the paper concludes by providing some lessons from the ghanaian experience

on the accuracy of economic observations do sub saharan trade statistics mean anything matching exporters freight on board fob trade statistics with the corresponding importers cost inventory and freight cif data this paper studies the quality of official information on trade between 36 african countries the author found the disparities in data so great as to make the official trade statistics almost useless for most empirical and policy studies he concluded that a statistics on matching exports and imports vary so much that the data cannot be used to assess the level of trade between african countries b the data are probably equally useless for assessing the direction of trade since the countries that exporters report as the destination of trade often fail to report corresponding imports c the data are inadequate for determining the composition of trade because countries report on different levels of detail and d large persistent apparent differences in trends in intra african trade may simply reflect different degrees of accuracy in country trade data finally the fact that reported fob exports often exceed the corresponding reported imports suggests either that smuggling is widespread or that importers are intentionally underinvoicing because of high african tariffs or quotas

savings growth and the resource curse hypothesis an important connection between recent attempts to understand the determinants of economic growth and the measurement of sustainability is the finding of a negative and significant relationship between natural resource abundance and economic growth this is the so called resource curse hypothesis using cross country regressions we offer evidence that the curse may itself be a manifestation of the inability of governments to manage large resource revenues sustainably in particular these results offer another perspective on the resource curse hypothesis the countries where growth has lagged are those where the combination of natural resource macroeconomic and public expenditure policies have led to a low rate of genuine saving net saving adjusted for resource depletion

price and monetary convergence in currency unions the franc and rand zones abstract theory suggests that a currency union will impose significant macroeconomic disciplines on its members the law of one price for example should lead to convergence of price levels at least for what may be regarded as tradeable goods likewise arbitrage would imply convergence of interest rates this paper looks at the two main surviving currency unions the franc and rand zones in africa to see whether and to what extent these generally accepted propositions find confirmation in the data each of the african currency unions has a dominant or core member france in the case of the franc zone and the republic of south africa rsa in the case of the rand zone our focus is on the small members in the periphery and for them there is the additional presumption that inflation and interest rates will be imported from the core despite some rather wide short run divergences and although convergence is slow we find that in the long run consumer price inflation is largely determined in the core the limited evidence available suggests that uncontrolled interest rates also converge to core country levels jel f31

consumption smoothing capital controls and the current account in ghana much of the empirical evidence on developing economies indicates that the basic intertemporal model of the current account fails to predict the dynamics of the actual current account series this article argues that the model can predict the dynamics of the current account series if it is appropriately adjusted to reflect the nature of capital mobility and exchange rate policies in these countries using data on ghana that span across capital control and liberalized regimes this article reports three finding first consistent with the existing empirical evidence the basic model fails to predict the dynamics of the actual current account second extending the basic model to capture variations in interest rates and exchange rates better explains the path of the actual current account balances only during the liberalized regime third tests of asymmetric access to the international financial market indicate that economic agents in ghana could not use the international financial market to smooth their con

speculative anticipations of sterling s return to gold was keynes wrong the view held by keynes that there was a speculative appreciation of sterling prior to its return to the gold standard has been challenged by gregor smith and todd smith who argue that expectations of return must have weakened the currency the authors demonstrate that the positive but decreasing trend displayed in the exchange rate data is consistent with a pattern of autoregressive convergence in fundamentals and that this continues to be true when there is a positive speculative element based on expectations of an early return hence the key features of the data seem compatible with keynes s views copyright 1994 by royal economic society

the demand for dairy products structure prediction and decomposition this article presents an analysis of the demand for dairy products first the structure of dairy product demand is estimated using the household food consumption survey data under the assumption of a two stage budgeting procedure a complete demand system for food incorporating demographic effects is estimated next using the demand relations estimated from cross section data prediction interval tests utilizing time series data are performed for milk and butter last factors affecting consumption are classified into economic and demographic effects and a decomposition of the causes of changes in demand over time is performed

real exchange rate behavior and economic performance in ldcs in recent years policy discussions have included increasing references to real exchange rate rer stability and correct exchange rate alignment as crucial conditions to improve economic performance in less developed countries ldcs 1 evidence from latin american asian and african countries is often quoted to support the view that the link between rer behavior and economic performance is strong it is argued that while unstable rers inhibited export growth in some of latin america their stability was fundamental in promoting east asian expansion in many african countries on the other hand persistently misaligned local currencies harmed the development of agriculture reducing domestic food supply 2 but in spite of its importance no empirical work has been attempted either to test the relationship between rer behavior and performance indicators at a broad multicountry level or to investigate the sources of rer variability and misalignment in ldcs the theoretical literature on rer determinants has been recently surveyed by sebastian edwards 3 he distinguishes between equilibrium and disequilibrium rers and between external and domestic rer determinants although domestic policies are often said to account for significant rer variations empirical work has only concentrated on the effect of nominal devaluations4 or speculative crises arising from expansionary monetary policies in a system of fixed ex

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

government and economic growth in the less developed countries an empirical study for 1960 1980 adam smith founded modern economics with a powerful argument that free markets are the best route to prosperity and economic growth his conclusion has been studied and debated by economists ever since including nobel prize winners friedman hayek kuznets lewis myrdal and schultz whatever economists have concluded since world war ii the majority of the less developed countries seem to have opted for extensive government regulation of the private sector and for a large public sector has the large government role slowed or accelerated the growth of ldcs obviously this is an important issue this study looks at government expenditure revenue raising and regulation greater emphasis is put on expenditure because 1 the revenue raised is presumably a function of the level of expenditure and 2 there are few internationally comparable measures of regulation there are virtually no empirical studies of the general impact of government on economic growth an extensive literature search turned up only three papers gemmell analyzed the impact of nonmarket sector growth on various measures of macroeconomic performance for 27 ldcs and developed countries for 1960 and 1970 he drew no general conclusions about the relation between the size of the nonmarket sector and economic growth marsden found a negative relation between tax gdp ratios and economic growth for a cross section of 20 ldcs and developed countries for the 1970 79 period 2 i found a negative relationship between the share of government consumption expenditure in gdp and the growth of per capita gdp for a cross section of 96 ldcs and developed countries over various time periods between 1961 and 1976 3 this paper extends the approach used in my 1983 article

aid and the dutch disease macroeconomic management when everybody loves you abstract countries that undertake serious and sustained programs of stabilization and structural adjustment should expect to attract significant new inflows of capital from donor countries and international institutions while apparently beneficial those flows can work at crosspurpose with other goals of the policy reforms in particular abundant foreign exchange loans can force an appreciation of the real exchange rate often through domestic inflation rather than a nominal appreciation in addition since the government is almost always the recipient of these loans it can crowd out the private sector if it increases its aggregate demand for domestic goods and services if the crowding out is accomplished by tight monetary policy it will fall primarily on private investment rather than consumption this paper shows that both of these problems have surfaced in ghana a country that has become a favorite of donors after demonstrating a serious commitment to policies promoted by the world bank and international monetary fund the paper also suggests modifications in macroeconomic policy that would help lower inflation and boost private investment

exchange rate dynamics in anticipation of time contingent regime switching modelling the effects of a possible delay abstract the procedure of fixing a currently floating exchange rate at a given and publicly announced future date has a broad range of applications based on a continuous time monetary exchange rate model with flexible prices this paper analyzes exchange rate dynamics during the transition from floating to fixed rates in a situation in which market participants are uncertain about adherence to the fixing date and in which they take account of a possible delay in the regime switch the closed form solutions derived here allow us to quantify announcement effects as well as effects on the exchange rate variance caused by news that significantly changes the market s assessment of uncertainty

the mixing ratio in the indonesian dairy industry the indonesian dairy industry has been viewed by the indonesian government as an industry that has the potential to improve the welfare of low income and landless farmers through providing them with an additional source of farm income as well the government sees the industry as a vehicle for providing opportunities for employment in rural areas from an economy wide viewpoint its development is viewed as a way indonesia might save foreign exchange since a large share of its dairy requirements have to be imported a variety of measures have been used to assist the industry this paper investigates one of the measures the busep scheme or mixing ratio regulation which requires domestic processors to use indonesian produced milk before imported milk c 1999 elsevier science b v all rights reserved

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

foreign trade and economic development sri lanka s experience abstract in the nearly 40 years since independence sri lanka has gone through three major trade policy phases in the first following independence the economy was relatively open in the second which commenced in 1960 a trade regime biased against exports was initiated this continued until 1977 when a strong liberalization effort was made thus sri lanka provides an interesting story of an individual country s experience relating choice of a trade regime to resource allocation and growth a number of important lessons can be drawn from this experience

evaluating participation in african monetary unions a statistical analysis of the cfa zones abstract thirteen african nations are engaged in two monetary unions with france often referred to as the cfa zone despite the acknowledged benefits of zone membership a convertible currency pooled resources and greater monetary and fiscal discipline several observers have questioned whether particular aspects of the zone such as the lack of autonomy of the two central banks and the surrender of the exchange rate as a policy instrument have impeded its members growth this paper addresses that question by testing whether cfa zone countries had different gnp growth rates from selected comparator countries during 1960 1982 results show that cfa countries grew significantly faster than comparator sub saharan african countries but usually slower and often significantly so than the whole sample of developing countries when the comparison is made by subperiod before and after 1973 cfa countries performance vis a vis that of their comparators improved during the 1973 1982 period casting further doubt on the claim that the monetary union is not functioning adequately

the outlook for asian dairy markets the role of demographics income and prices abstract the paper first presents a 10 year outlook for major asian dairy markets china india indonesia japan south korea malaysia the philippines thailand and vietnam based on a world dairy model then using heien and wessells s 1988 heien d m wessells c 1988 the demand for dairy products structure prediction and decomposition american journal of agricultural economics 70 219 28 technique dairy product consumption growth is decomposed into contributions generated by income growth population growth price change and urbanization and these contributions are quantified using the world dairy model the paper also analyzes the impacts of alternative assumptions of higher income levels and technology development in asia on asian dairy consumptions and world dairy prices the outlook projects that asian dairy consumption will continue to grow strongly in the next decade the consumption decomposition suggests that the growth would be mostly driven by income and population growth and as a result would raise world dairy prices the simulation results show that technology improvement in asian countries would dampen world dairy prices and meanwhile boost domestic dairy consumption

inflation and monetary policy in selected west and central african countries abstract this paper studies the conduct and performance of monetary policy in five west and central african countries cameroon cote d ivoire gabon ghana and nigeria the first three are members of the cfa zone and maintain a fixed peg vis a vis the french franc the other two have recently opted for a more flexible exchange rate regime no general conclusion can be drawn on the monetary policy exchange rate policy nexus estimates of the offset coefficient are significantly different from negative one but var estimation results on the ability of the monetary authority to pursue an independent inflation target are mixed the monetary authorities of ghana and nigeria sterilize the accumulation of net foreign assets to a limited degree no such evidence exists for cfa zone members

the international liquidity explosion and worldwide inflation the evidence from sterilization coefficient estimates abstract many commentators have pointed to the huge us payments deficits and international liquidity explosion of the early 1980s as the major cause of the concomitant rapid rates of monetary expansion abroad and subsequent acceleration of worldwide inflation this international monetarist interpretation rests however on the assumption of only limited sterilization of reserve inflows by foreign monetary authorities this paper uses the major econometric estimates of sterilization coefficients to calculate the implied contributions of the reserve increases of this period to foreign monetary expansion these suggest that the reserve increases did in fact make a non trivial contribution to global monetary expansion but that for most countries they were not the dominant cause

foreign debt accumulation financial and fiscal effects and monetary policy reactions in developing countries abstract this paper analyzes the effects of the current account of government and government guaranteed foreign debt on the one hand and net foreign liabilities or the cumulated current account deficit on the other hand in a sample of 26 developing countries while the cumulated current account deficit generates stabilizing forces pissibly through financial and wealth effects large amounts of government and government guaranteed debt produce destabilizing effects by stimulating capital flight i also find that monetary policy reactions are stabilizing in the case of the cumulated current account deficit but desstabilizing in the case of a build up of government and government guaranteed foreign debt jel f32 f34

is africa different abstract africa s macroeconomic response to external shocks was significantly differrent from that of other developing countries during 1976 1986 nonparametric tests that correct for differing initial conditions indicate significantly lower economic growth in african economies average inflation was also significantly lower while current account deficits were larger economic policies in african countries are characterized by significantly larger budget deficits and government current expenditure as a share of gross domestic product and by greater inward orientation african economies in the cfa franc zones are distinguished by relatively lower inflation budget deficits and less reduction in investment gnp ratios

the southern african development community suitable for a monetary union abstract this paper investigates whether a monetary union is desirable among the countries of the southern african development community sadc we employ a generalised auto regressive conditional heteroscedasticity garch model to consider the share of the variation in real exchange rates rers vis a vis south africa that can be explained by the divergence in monetary and fiscal policies the results show that monetary integration would substantially eliminate real exchange rate variation due to different monetary policies for some members the study concludes that a monetary union that embraces all sadc members would amass large costs relative to the benefits and hence would not be desirable

economic growth in africa abstract this paper draws on the recent endogenous growth methodology to study the factors behind differences in per capita growth rates across africa the results indicate that various economic factors including initial conditions investment population growth trade orientation inflation financial development and the growth of the government sector contribute significantly to economic growth in addition to economic variables we find the degree of political freedom to be a significant contributor to economic growth finally we find some evidence that economic growth by the members of the cfa franc zone has not fared well in comparison to other african countries