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Author: Hana Polackova Publisher: ISBN: Category : Languages : en Pages :
Book Description
How a price increase in the nontradables sector of a transition economy affects the exchange rate, relative prices, wages, and, indirectly, the movement of factors of production. Polackova analyzes the macroeconomic effects of inflation in the nontradables sector of a small open economy to suggest how different macroeconomic policies would facilitate structural adjustment after price liberalization in a transition economy. She uses a Mundell-Fleming rational expectations model of a two-sector economy to study how inflation in the nontradables sector affects the exchange rate, relative prices, wages, and, indirectly, the movement of factors of production. She applies the analysis to a cut in producer subsidies in the nontradables sector and assesses how macroeconomic policies involving the management of supply and demand might affect government objectives for the economy and redistribution. She concludes that to alleviate the transitory negative effects of a cut in producer subsidies, targeted household transfers combined with a tax cut, if possible, are superior to expansionary monetary and fiscal policies. Making the tax cut less than the cut in subsidies and financing targeted lump-sum household transfers from government savings reduce the risk of poverty and external imbalances. The potential benefits from exchange rate management depend greatly on the level of wage discipline. This paper - a product of the Country Operations Division, Europe and Central Asia, Country Department II - is part of a larger effort in the department to support countries in continuing and sustaining social and economic growth.
Author: Hana Polackova Publisher: ISBN: Category : Languages : en Pages :
Book Description
How a price increase in the nontradables sector of a transition economy affects the exchange rate, relative prices, wages, and, indirectly, the movement of factors of production. Polackova analyzes the macroeconomic effects of inflation in the nontradables sector of a small open economy to suggest how different macroeconomic policies would facilitate structural adjustment after price liberalization in a transition economy. She uses a Mundell-Fleming rational expectations model of a two-sector economy to study how inflation in the nontradables sector affects the exchange rate, relative prices, wages, and, indirectly, the movement of factors of production. She applies the analysis to a cut in producer subsidies in the nontradables sector and assesses how macroeconomic policies involving the management of supply and demand might affect government objectives for the economy and redistribution. She concludes that to alleviate the transitory negative effects of a cut in producer subsidies, targeted household transfers combined with a tax cut, if possible, are superior to expansionary monetary and fiscal policies. Making the tax cut less than the cut in subsidies and financing targeted lump-sum household transfers from government savings reduce the risk of poverty and external imbalances. The potential benefits from exchange rate management depend greatly on the level of wage discipline. This paper - a product of the Country Operations Division, Europe and Central Asia, Country Department II - is part of a larger effort in the department to support countries in continuing and sustaining social and economic growth.
Author: International Monetary Fund Publisher: International Monetary Fund ISBN: 1451844239 Category : Business & Economics Languages : en Pages : 33
Book Description
Recently, monetary authorities have increasingly focused on implementing policies to ensure price stability and strengthen central bank independence. Simultaneously, in the fiscal area, market development has allowed public debt managers to focus more on cost minimization. This “divorce” of monetary and debt management functions in no way lessens the need for effective coordination of monetary and fiscal policy if overall economic performance is to be optimized and maintained in the long term. This paper analyzes these issues based on a review of the relevant literature and of country experiences from an institutional and operational perspective.
Author: Jongrim Ha Publisher: World Bank Publications ISBN: 1464813760 Category : Business & Economics Languages : en Pages : 513
Book Description
This is the first comprehensive study in the context of EMDEs that covers, in one consistent framework, the evolution and global and domestic drivers of inflation, the role of expectations, exchange rate pass-through and policy implications. In addition, the report analyzes inflation and monetary policy related challenges in LICs. The report documents three major findings: In First, EMDE disinflation over the past four decades was to a significant degree a result of favorable external developments, pointing to the risk of rising EMDE inflation if global inflation were to increase. In particular, the decline in EMDE inflation has been supported by broad-based global disinflation amid rapid international trade and financial integration and the disruption caused by the global financial crisis. While domestic factors continue to be the main drivers of short-term movements in EMDE inflation, the role of global factors has risen by one-half between the 1970s and the 2000s. On average, global shocks, especially oil price swings and global demand shocks have accounted for more than one-quarter of domestic inflation variatio--and more in countries with stronger global linkages and greater reliance on commodity imports. In LICs, global food and energy price shocks accounted for another 12 percent of core inflation variatio--half more than in advanced economies and one-fifth more than in non-LIC EMDEs. Second, inflation expectations continue to be less well-anchored in EMDEs than in advanced economies, although a move to inflation targeting and better fiscal frameworks has helped strengthen monetary policy credibility. Lower monetary policy credibility and exchange rate flexibility have also been associated with higher pass-through of exchange rate shocks into domestic inflation in the event of global shocks, which have accounted for half of EMDE exchange rate variation. Third, in part because of poorly anchored inflation expectations, the transmission of global commodity price shocks to domestic LIC inflation (combined with unintended consequences of other government policies) can have material implications for poverty: the global food price spikes in 2010-11 tipped roughly 8 million people into poverty.
Author: Alejandro López Publisher: World Bank Publications ISBN: Category : Languages : en Pages : 40
Book Description
January 1997 The sharp drop in private savings in the 1990s in Colombia can be attributed to a decline in private disposable income and, to a lesser extent, to growth in consumption. The sharp drop in private savings in the 1990s in Colombia can be attributed to a decline in private disposable income and, to a lesser extent, to growth in consumption. The permanent decline in private disposable income in Colombia between 1950 and 1990 is closely linked to tax increases. This trend was accentuated in the early 1990s by a reduction in corporations' gross operating surplus. Contrary to the usual hypothesis, López shows that in the 1990s private consumption had a relatively minor effect on national savings. He highlights two findings: * Private consumption's recent behavior can hardly be called a boom. It declined throughout the second half of the 1980s before finally showing an upturn in 1992 equivalent to 2 percent of gross national product. * Consumption of durable goods after trade reform cannot be blamed for the decline in private savings. In fact, savings began falling in 1988 and, until 1993, trade reform did not cause a stock adjustment of durable goods. This paper - a product of the Macroeconomics and Growth Division, Policy Research Department - is part of a larger effort in the department to assess the determinants of saving.
Author: Hana Polackova
Author: Hana Polackova
Author: Hana Polackova
Author: 
Author: Hana Polackova
Author: International Monetary Fund
Author: Jongrim Ha
Author: Jean Olson Lanjouw
Author: William Easterly
Author: Hana Polackova
Author: Alejandro López