fiscal policies in eastern europe we focus on the role of fiscal policies in macroeconomic stabilization in eastern europe and assess the sustainability of fiscal policies for the central and eastern european economies in transition we show the main causes of fiscal imbalances experienced at the beginning of the transition process countries that adopted tight fiscal policies were more successful with their inflation stabilization programmes have experienced a faster recovery of growth and did not experience a steeper decline in output countries with unsustainable fiscal policies all floated their exchange rate but there are both floating and peg arrangements among the successful stabilizers in all the successful cases however current account convertibility was established we also discuss the experience of poland and romania two polar cases in terms of fiscal policies and present lessons and policy recommendations for other economies in transition copyright 1997 by oxford university press

residential peak electricity demand response highlights of some behavioural issues electricity demand response refers to consumer actions that change the utility load profile in a way that reduces costs or improves grid security the focus of demand response has mainly been on the commercial and big industrial sectors because of the large demand reduction that they can offer to the utility grid operators utilities are showing increasing interest in residential demand response rdr rdr can be treated as an energy resource which can be assessed and commercially developed however there are still some issues that remain to be addressed for rdr to be successful these include price unresponsiveness of some residential consumers equity issues and high cost of the metering infrastructure the aim of this paper is to investigate and present some of the challenges in achieving effective voluntary demand reduction based on a review of residential demand response literature as well as the general residential energy use behaviour literature the authors propose the use of a hybrid engineering approach using social psychology and economic behaviour models to overcome these challenges and realize the benefits of supply security and cost management

predicting exchange rate crises mexico revisited abstract this paper predicts ex ante probabilities of currency crises and sizes of expected devaluations month by month for mexico between 1980 and 1986 the forces contributing to speculative attacks on the mexican peso include domestic fiscal and monetary shocks external credit shocks and relative price shocks reducing domestic credit growth increasing the uncertainty surrounding this growth and reducing the size and perhaps increasing the frequency of currency realignments might have greatly reduced the amount of currency speculation against the peso between 1980 and 1986 anticipated external credit supply shocks played a relatively minor role during mexico s balance of payments crises

macroeconomic effects of anticipated devaluations with informal financial markets abstract the paper analyzes the macroeconomic effects of devaluation in a general equilibrium model of a developing country in which controls on interest rates and foreign exchange restrictions lead to the emergence of informal financial markets the complexity of the model precludes an analytical treatment a simulation approach based on parameters derived from estimates in the existing literature is used to explore how the existence of informal financial markets causes the effects of an official devaluation to be felt before the devaluation itself occurs

firm reputation and incentives to milk pending patents abstract in this paper we develop a theory of patenting in which a firm preserves its reputation by only applying for a patent whenever a truly patentable idea has been generated firms have a short run incentive to deviate and receive additional rents from unworthy pending patents as well as potential rents from pto mistakes in granting patents we provide conditions for reputation to be preserved in equilibrium and analyze which market environments are favorable for such an equilibrium to exist in particular we analyze the merits of different patent systems

economic fundamentals and self fulfilling crises further evidence from mexico abstract this paper considers a model of debt stabilization under a fixed exchange rate in which a currency crisis can develop as the result of self fulfilling speculation following a bifurcation in the behavior of economic fundamentals based on this theoretical framework and by exploiting the test developed by jeanne 1997 this paper provides evidence that self fulfilling speculation was at work in the 1994 mexican crisis in terms of fundamentals we show that the critical variables in generating the mexican crisis were the fast rise in us denominated public debt tesebonos the appreciated real exchange rate and the small rises in unemployment and primary deficit

time consistent collection of optimal seigniorage a unifying framework this paper reviews the existing literature on the time consistency problem of seigniorage collection when monetary policy is determined by optimal taxation considerations it develops a unifying accounting framework and suggests a general measure for seigniorage which encompasses the standard measures employed in the literature in addition the ex ante optimal solution to the optimal taxation problem is derived and interpreted in relation to the ramsey principle we show that the different recommendations of the public finance literature i e the friedman rule of optimal deflation moderately positive inflation and seigniorage maximizing inflation are specific solutions to the optimal taxation problem the paper continues with a formal illustration of the time consistency problem of the ex ante optimal policy and the characterization of the time consistent solution under discretion as possible solutions to the time consistency problem we consider reputational forces institutional reforms that establish central bank independence and specific ways of asset and debt management in particular it is formally shown that a modified version of the asset and debt management scheme suggested by persson persson and svensson is not only necessary but also sufficient for optimality although this did not hold in their model

uptake and usage of cost reflective electricity pricing insights from psychology and behavioural economics abstract the australian electricity industry like many other countries globally is currently facing the complex challenge of reforming electricity tariffs momentum is growing for transitioning residential consumers toward more cost reflective pricing that better reflects the true costs of generation and supply and sends a price signal that presumably incentivises reduced consumption during peak periods under such tariffs customers pay more for electricity used during times of peak demand unlike traditional flat rate tariffs where the price remains stable regardless of time or demand pilot trials indicate that cost reflective tariffs might succeed in reducing peak demand but often only for a small minority of customers such that population wide demand response is minimal or insignificant in this paper we apply insights from psychology and behavioural economics to identify how cost reflective pricing can be designed depicted and delivered to enhance customer uptake and optimal usage thereby facilitating appropriate demand response for a larger cross section of the population by carefully considering the likely impact of relevant cognitive biases and psychological factors which routinely shape human decision making and behaviour we are able to propose practical strategies that industry can adopt to maximise the prospect of cost reflective pricing achieving significant population level peak demand reductions while providing shared benefits for customers retailers networks and regulators alike

fiscal deficits exchange rate crises and inflation this paper extends earlier work on unsustainable monetary policies by endogenizing the regime switch that ultimately restores sustainability within this framework we analyse exchange rate based stabilization programmes and show how constraints on central bank borrowing during an exchange crisis influence timing and nature of the post collapse equilibrium such constraints introduce non neutralities more restrictive pre collapse credit policies increase the post collapse inflation rate external shocks can destroy consistency between fiscal programmes and inflation targets causing reserve losses exchange rate changes and higher inflation balance of payments crises are the mechanism through which fiscal imbalances translate into higher inflation rather than an alternative explanation of it this paper deals with inflation fiscal deficits and exchange rate policy in high inflation countries the experience of the past decade has presented a series of puzzles for example countries attempting to stabilize inflation through an exchange rate freeze often saw inflation accelerate after the collapse of the experiment to levels well above those observed before the programme was implemented another puzzle concerns the relation between inflation and balance of payments crises in many countries a bop crisis forcing a change in exchange rate policy often led to a persistent increase in inflation liviatan and piterman 1984 this has led to doubts about the relevance of fiscal deficits in explaining inflationary episodes leading many to see bop crises as an independent explanation of inflation but this apparent relation is a puzzle a bop crisis cum devaluation can at most explain a jump in the price level but not a sustained increase in inflation in this paper we demonstrate that these puzzles can be explained fully by drawing on the public finance approach to inflation initiated by phelps 1973 thus the fiscal versus bop controversy is not a real one our analysis shows that bop crises and exchange rate shifts are part of the mechanisms through which fiscal imbalances translate into higher inflation rather than alternative explanations to make these points we present a simple open economy model to analyse the transition to a fixed exchange rate regime discuss sustainability and demonstrate what happens when policy measures are inconsistent and the fixed regime unsustainable we also demonstrate how the constraints under which the central bank has to operate the exchange rate regime influence the timing of the attack the post collapse inflation rate and the effects of pre collapse fiscal policy on the post collapse equilibrium the analysis builds on the work of sargent and wallace 1982 and liviatan 1984 on unsustainable monetary policies cf buiter 1988 1989 and drazen and helpman 1987 for open economy variants contrary to this literature we link the timing of the regime switch towards sustainable policies to rational speculative behaviour rather than assuming it to be exogenous the introduction of rational speculators forcing a regime switch draws on the literature on speculative attacks on central bank reserves initiated by 8i

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

inflation and the financing of government expenditure an introductory analysis with an application to turkey this article presents a simple framework to assess the consistency of appropriately defined fiscal deficits with other macroeconomic targets such as inflation it also considers the relation of fiscal deficits to output growth real exchange rate developments and management of internal and external debt finally it considers the implications of relying on interest bearing government debt to postpone the adjustment necessary to restore consistency with inflation targets it demonstrates how the intertemporal budget constraint of the government creates a tradeoff between current and future adjustment real interest rates and output growth rates are shown to determine the terms at which this tradeoff takes place the usefulness of this framework is demonstrated through an analysis of fiscal policy options in turkey in 1985

the voluntary price for the small consumer real time pricing in spain abstract in 2013 a period of reform was initiated of the regulatory framework of the spanish electricity sector a year later the methodology for the calculation of the voluntary price for the small consumer vpsc was approved a real time price tariff for small domestic consumers under this price setting system vpsc consumers are billed according to their hourly consumption and hourly prices along the day directive 27 2014 eu on energy saving was also transposed to spanish regulation in 2014 the impact on the spanish electricity market and domestic vpsc consumers of these two recent energy policy modifications are analyzed in this work a qualitative model based on the flexibility of the merit order curves is first introduced to formulate a number of hypotheses a set of scenarios are then examined to quantify the main effects on the market and on domestic consumers the results show that domestic energy saving and to a lesser extent load shifting scenarios can diminish the mean hourly price and the cost of the annual traded energy in the market nevertheless these reductions are mainly granted to large qualified consumers since domestic consumers mostly benefit from the reduction of their energy demand rather than from a reduction of the price

voting on pensions a survey abstract the paper presents a nonexhaustive survey of the literature designed to explain emergence size and political sustainability of pay as you go pension systems it proposes a simple framework of analysis a small open two overlapping generation economy model around which some variants are displayed dictatorship of the median voter is assumed the text is organized to answer the following questions i do political equilibria with payg pension schemes exist ii why do they emerge iii what are the conditions for the participation constraint of the pension game to be verified and finally iv what is the size of the pension system chosen by the median voter and how is this size influenced by an exogenous e g demographic shock

speculative currency attacks and balance of payments crises abstract this paper reviews the recent theoretical literature on collapsing exchange rate regimes using a combination of technique intuition and realworld observation we discuss the literature s main insights point out some unresolved questions and offer suggestions for future research the survey should be of interest to both specialists and non specialists in the field of international macroeconomics

on a simple rule for the optimal inflation rate in second best taxation abstract the optimal inflation rate is analyzed in the framework of dynamic second best with endogenous factor prices it is shown that when the marginal excess burden of taxation is relatively small the optimal inflation rate is approximated by a simple rule the paper also analyzes the robustness of this rule to the specification of the model money as an input in utility or production

debt deficits and inflation an application to the public finances of india abstract the paper studies the solvency of the indian public sector and the eventual monetization and inflation that would be implied by stabilization of the debt gnp ratio in the absence of changes in the primary deficit the nonstationarity of the discounted public debt suggests that indefinite continuation of the pattern of behavior reflected in the historical time series process is inconsistent with the maintenance of solvency this message is reinforced by the recent behavior of the debt gnp ratio and of the ratio to gnp of the sum of the primary budget surplus and seigniorage our estimates of the base money demand function suggests that even maximal use of the inflation tax would not be sufficient to restore solvency measures to reduce the primary deficit are therefore unavoidable

the settlement of patent litigation in this article i develop a model to analyze patent licensing that is induced as part of a settlement agreement to avoid litigation of the issue of patent validity the patentee possesses private information about patent validity and makes a take it or leave it settlement offer to a single potential rival an essentially unique sequential equilibrium exists if out of equilibrium beliefs are restricted appropriately the model analyzes the effect of the probability of settlement and litigation

external debt inflation and the public sector toward fiscal policy for sustainable growth which tradeoffs are involved in formulating an external debt strategy should expenditure be cut to improve the current account or will this reduce future output growth thus undermining the benefits of any debt reduction are there alternatives that allow satisfactory output growth without jeopardizing creditworthiness how can the necessary surplus of savings over investment be brought about at levels of investment high enough to sustain output growth should the government contribute to the internal adjustment by reducing its deficit macroeconomic targets for inflation and growth and creditworthiness constraints on debt issue impose restrictions on the extent to which deficits can be financed can the government cover the deficit within these targets and constraints the absence of such consistency forebodes future policy change and so undermines the credibility of the adjustment program the author uses empirical work on turkey to illustrate the interactions between fiscal deficits and the macroeconomic variables upon which fiscal consistency hinges

a critical evaluation of exchange rate policy in turkey abstract this paper reviews and critically evaluates the exchange rate policy followed in turkey in the post 1980 period during which a far reaching program of liberalization has been launched we conclude that the new exchange rate policy has been essential for turkey s regaining its creditworthiness furthermore it has positively contributed to growth of output and exports and to expansion of tradables production relative to nontradables persistence of inflation and weakness of private investment in tradables overshadow the successes recorded in other areas and cast doubt over the sustainability of turkey s outward orientation we argue that the root cause of these problems has been inconsistencies between overall economic policies rather than the exchange rate policy itself we compare the period of real appreciations since late 1998 with the earlier period of real depreciations and draw policy implications

tight money and inflation abstract in a recent paper sargent and wallace present an example where tightening of monetary policy over a specified time interval in conjunction with a constant deficit leads to an increase in the rate of inflation not only beyond this interval but even from the outset in the present paper i show how the latter result can be derived from a standard monetary growth model of the sidrauski brock type this enables a relatively simple interpretation of the apparent paradox

fiscal policy debt management and exchange rate credibility lessons from the recent italian experience abstract this paper explores some potential determinants of exchange rate credibility with reference to the italian experience of the 1990s the analysis relies on a nonlinear framework emphasizing shifts between credible and non credible states and assuming a significant degree of persistence in the above regimes almost all fiscal and debt management indicators display significant effects on devaluation expectations the main policy implications of the paper are that a restrictive fiscal stance a lengthening of average debt maturity and an increase in the share of foreign denominated debt are crucial to stabilize the lira exchange rate and to qualify italy in the former group of countries which will join emu

household responsiveness to residential demand response strategies results and policy implications from a swedish field study abstract to realize the benefits of smart grids residential demand response dr aims to increase demand flexibility by influence household electricity consumption although price based dr programs have shown potential there is a need to further investigate the effectiveness of dr in energy strategy and policy development the evaluation of dr has focused on the impact on overall power demand assuming that consumers are economically rational decision maker however recent findings suggest that consumer responses have been insufficient and calls have been made to identify novel evaluation approaches that better reflect the human dimension of energy consumption continuing this line of enquiry this paper aims to investigate the effectiveness of dr and explore the potential of environmental incentives for increased consumer engagement we propose an interdisciplinary evaluation framework to understand variations in household responsiveness to dr strategies which is tested in a swedish dr field trial covering 136 households during 2017 results suggest that the effectiveness of dr varies widely across household type ranging from substantial reductions in overall consumption and during peak periods to increases in consumption during peak periods furthermore a clear favor of price incentives compared to environmental incentives as the most efficient strategy to increase demand flexibility was observed

fiscal adjustment and stabilization policies the polish experience to an extent at least economic stabilization must come first this is the case both because high inflation if it exists is so destructive that no policy maker recognizing its effects could accept the continuation of inflationary pressure without taking measures to fight it and from the evident truth that systemic and structural changes need a relatively long time to be accomplished the priority given to economic stabilization means imposing significant constraints on the form of the adjustment programme and on the way it is implemented

government finance in the wake of currency crises we address three questions i can classical models be reconciled with the fact that many crises are marked by high rates of depreciation and small increases in seignorage revenue ii what are the implications of different financing methods for post crisis rates of inflation and depreciation iii how do governments pay for the fiscal costs associated with currency crises to study these questions we use a general equilibrium model in which prospective government deficits trigger a currency crisis we then use our model in conjunction with fiscal data to interpret government financing in the wake of three recent currency crises korea 1997 mexico 1994 and turkey 2001

tight money and inflation further results abstract the sargent wallace results on inflationary effects of monetary restraint are considered in a sidrauski money growth model when the utility function is unrestricted except for separability temporary monetary tightening will eventually lead to higher inflation when the deficit is fixed only if the elasticity of money demand with respect to the money growth rate is less than unity it is also shown that for inflation to rise immediately further requires the elasticity with respect to the nominal interest rate to be no less than unity

electricity consumption in g7 countries a panel cointegration analysis of residential demand elasticities this article applies recently developed panel unit root and panel cointegration techniques to estimate the long run and short run income and price elasticities for residential demand for electricity in g7 countries the panel results indicate that in the long run residential demand for electricity is price elastic and income inelastic the study concludes that from an environmental perspective there is potential to use pricing policies in the g7 countries to curtail residential electricity demand and thus curb carbon emissions in the long run

quantitative approaches to fiscal sustainability analysis this case study of fiscal sustainability in turkey after the crisis in 2001 reviews and extends quantitative approaches to fiscal sustainability analysis and brings them together in a user friendly tool applicable in a data sparse environment it combines a dynamic simulations approach with a steady state consistency approach it also incorporates user defined stress tests and stochastic simulations to deal with uncertainty and it derives the future distribution of debt output ratios evaluating the fiscal adjustment required to stabilize them value at risk analysis shows that considerable risks remain unless explicit feedback rules from debt surprises to the primary surplus are implemented

debt relief and economic growth in mexico could external restraint and internal balance in mexico have been reconciled at levels of savings and investment that allowed satisfactory growth in output without the 1989 90 restructuring of debt what are the likely implications of mexico s brady deal on economic growth what are the macroeconomic effects of debt equity swaps this article develops and estimates a model to address these issues the analysis concludes that the 1989 90 agreement in mexico will contribute materially to macroeconomic stability and the restoration of economic growth copyright 1991 by oxford university press

currency crises and contingent liabilities a contingent liability is a future spending commitment that is realized with some probability international organizations emphasize the dangers of contingent liabilities when providing advice why one answer is obvious if significant contingent liabilities are realized they commit governments to substantial fiscal costs there is a further reason by taking on a contingent liability the government can increase the probability of the underlying shock taking place this paper describes how the issuance of government guarantees and the methods by which they are financed affect the probability of crises taking place it also discusses the determinants of post crisis inflation and depreciation

pioneering inventors or thicket builders which u s firms use continuations in patenting why do firms use continuations in the prosecution of their patents motivated by the widespread use of continuations by u s firms and the prominence of this procedure in u s patent policy debates we investigate the influence of corporate and patent characteristics on the use of continuations we employ novel data on applicants and their filings of three types of continuations the continuation application cap the continuations in part cip and divisions during 1981 2000 to distinguish among the motives for continuing patents we find that cips are disproportionately filed by research and development intensive firms that patent heavily and that these continuations are more common in chemical and biological technologies patents issuing from cips cover relatively important inventions and their use appears consistent with a strategy of protecting pioneering inventions in contrast caps and divisions are associated with less important patents assigned to capital intensive firms particularly in computer and semiconductor fields and appear to be used in defensive patenting strategies we analyze the effects of the 1995 change in patent term and find that the act reduced continuations overall and shifted the output of continuations toward less important patents

price environment and security exploring multi modal motivation in voluntary residential peak demand response peak demand on electricity grids is a growing problem that increases costs and risks to supply security residential sector loads often contribute significantly to seasonal and daily peak demand demand response projects aim to manage peak demand by applying price signals and automated load shedding technologies this research investigates voluntary load shedding in response to information about the security of supply the emission profile and the cost of meeting critical peak demand in the customers network customer willingness to change behaviour in response to this information was explored through mail back survey the diversified demand modelling method was used along with energy audit data to estimate the potential peak load reduction resulting from the voluntary demand response a case study was conducted in a suburb of christchurch new zealand where electricity is the main source for water and space heating on this network all water heating cylinders have ripple control technology and about 50 of the households subscribe to differential day night pricing plan the survey results show that the sensitivity to supply security is on par with price with the emission sensitivity being slightly weaker the modelling results show potential 10 reduction in critical peak load for aggregate voluntary demand response

a viable gold standard requires flexible monetary and fiscal policy national domestic credit expansion dce policies which offset the effect of money demand shocks on international gold reserves the gold standard collapses with certainty in finite time through a speculative selling attack against one of the currencies various policies for postponing a collapse are considered when a responsive dce policy eliminates the danger of a run on a country s reserves the exogenous shocks disturbing the system which previously were reflected in reserve flows now show up in the behaviour of the public debt unless the primary non interest government deficit is permitted to respond to these shocks the public debt is likely to rise or fall to unsustainable levels for the idealized gold standard analysed in the paper viability can be achieved only through the active and flexible use of monetary and fiscal policy

the devil is in the details household electricity saving behavior and the role of information abstract the purpose of this paper is to analyze swedish households willingness to increase their daily efforts to save electricity the analysis builds on a broad theoretical framework which embraces both economic and norm based motivations in explaining household behavior the paper pays particular attention to the role of information about the availability of different behavioral changes that can be undertaken at the household level the empirical results are based on a postal survey that was sent out to 1200 swedish households and the econometric analysis is carried out within a so called ordered probit framework our results indicate that costs environmental attitudes and social interactions are all important determinants of electricity saving activities within swedish households we tested the hypothesis that information about available savings measures that is presented in a more concrete and specific way is more likely to affect stated behavior than is more general information and the data collected support this notion the paper ends by discussing some implications of these results for the design of future informative policy measures in the energy efficiency field

categorization of residential electricity consumption as a basis for the assessment of the impacts of demand response actions abstract in a smart er grid context the existence of dynamic tariffs and bidirectional communications will simultaneously allow and require an active role from the end user concerning electricity management however the residential end user will not be always available to manage energy resources and decide based on price signals and preferences needs the best response actions to implement or the best usage of the electricity produced locally therefore energy management systems are required to monitor consumption generation storage and to make the best decisions according to input signals and the user s needs and preferences the design of adequate algorithms to be implemented in those systems require the prior characterization of domestic electricity demand and categorization of loads according to availability typical usage patterns working cycles and technical constraints automated demand response actions must be tailored and chosen according to this previous analysis of load characteristics in this paper a characterization of household electricity consumption is presented and an operational categorization of end use loads is proposed the existing potential for demand response to a diversified set of management actions is described and a tool to assess the impact of implementing several actions with different rates of penetration of energy management systems is presented the results obtained show the potential savings for the end user and expected changes in the load diagram with a decrease of the aggregated peak electricity demand and a smoothed valley

the relationship between inflation and the budget deficit in turkey this article analyzes the empirical relationship between inflation and the budget deficit for the turkish economy by a multivariate cointegration analysis a single equation model shows that the scaled budget deficit as well as income growth and debt monetization significantly affects inflation in turkey the conditional model of inflation is constant and it encompasses a previously estimated model

quantitative approaches to fiscal sustainability analysis a case study of turkey since the crisis of 2001 this case study of fiscal sustainability in turkey after the crisis in 2001 reviews and extends quantitative approaches to fiscal sustainability analysis and brings them together in a user friendly tool applicable in a data sparse environment it combines a dynamic simulations approach with a steady state consistency approach it also incorporates user defined stress tests and stochastic simulations to deal with uncertainty and it derives the future distribution of debt output ratios evaluating the fiscal adjustment required to stabilize them value at risk analysis shows that considerable risks remain unless explicit feedback rules from debt surprises to the primary surplus are implemented

borrowing to defend the exchange rate and the timing and magnitude of speculative attacks abstract the paper analyses the implications for the timing and magnitude of a speculative attack on a fixed exchange rate of government borrowing to increase the stock of international reserves it is shown that such borrowing reduces the likelihood of an early collapse and increases the likelihood of an eventual collapse the magnitude of the speculative attack also increases

an interest rate defense of a fixed exchange rate defending a government s exchange rate commitment with active interest rate policy is not an option in first generation models of speculative attacks in those models the interest rate is the passive reflection of currency depreciation expectations in this paper we show how to adapt the first generation framework to allow for an interest rate defense it is shown that increasing domestic currency interest rate before the attack makes domestic assets more attractive according to an asset substitution effect but weakens the domestic currency by increasing the government s fiscal liabilities as a result an interest rate defense can be successful only conditional on sound fiscal policy

the long run creditworthiness of developing countries theory and practice this paper analyzes the determinants of developing country long run creditworthiness focusing on the process of capital accumulation relative to external debt creditworthiness depends on the actual capital stock compared with a critical level representing the gross wealth just sufficient to ensure that interest payments to foreigners never exhaust national output given expected gross inflows and existing outstanding debt hence the probability of rescheduling is linked to debt service capital net inflows capital investment rates and income levels the empirical results based on a probit analysis of historical rescheduling incidents are quite robust and supportive of the theoretical framework

stabilization with exchange rate management stabilization programs in open economies typically consist of two stages in the first stage the rate of currency devaluation is reduced but the fiscal adjustment does not eliminate the fiscal deficit that causes growth of debt and loss of reserves making a future policy change necessary only later at a second stage is this followed by either an abandonment of exchange rate management or by a sufficiently large cut in the fiscal deficit we study how different second stage policy changes affect economic dynamics during the first stage these changes include tax increases budget cuts on traded and nontraded goods and increases in the growth rate of money

patent quality and examination in europe following the publication of the federal trade commission report 2003 policymakers in many jurisdictions started to consider administrative patent system reforms the three largest patent offices the european patent office epo the japanese patent office jpo and the united states patent and trademark office uspto introduced measures to cope with the growing number of claims and volume of patent applications which were deemed too complex and thus prone to uncertain interpretation by courts and competitors besides revamping the fee structure the epo also modified its rule base in 2010 under the motto raising the bar requiring applicants to restrict the scope of subject matter considered in prior art search and examination this paper reports on some effects of these measures in patents granted by the epo the number of claims started to decline in 2008 when new claims fees became effective claims sections in patents became shorter and independent claims longer and presumably more specific the grant rate remained at relatively low levels but the epo was unable to stem the use of divisional filings 1 the developments at the epo point to a high private value of delay options delay may be achieved either by making use of explicit statutory rules or by

prospective deficits and the asian currency crisis this paper argues that a principal cause of the 1997 asian currency crisis was large prospective deficits associated with implicit bailout guarantees to failing banking systems the expectation that these future deficits would be at least partially financed by seigniorage revenues or an inflation tax on outstanding nominal debt led to a collapse of the fixed exchange rate regimes in asia we articulate this view using a simple model whose key feature is that a speculative attack is inevitable once the present value of future government deficits rises we present empirical evidence in support of the key assumptions underlying our interpretation of the crisis