http://hdl.handle.net/10023/650 2013-04-25T15:17:40Z http://hdl.handle.net/10023/657 Abstract: Data from a unique monetary ‘experiment’ conducted in the UK during the period 1994-97 are used to investigate the cost of political intervention in monetary policy. The paper finds that the difference between government bond yields in Germany (but not the US) and the UK was systematically related to an index of the credibility of monetary policy constructed on the basis of the frequency of agreements/ disagreements between the Minister of Finance who took the decisions on interest rates and the Bank of England, whose recommendations were published with a lag, with disagreements causing an increase in the yield differential. Description: Previously in the University eprints HAIRST pilot service at http://eprints.st-andrews.ac.uk/archive/00000055/; Revised November 2001 2001-01-01T00:00:00Z Cobham, David Papadopoulos, Athanasios Zis, George Data from a unique monetary ‘experiment’ conducted in the UK during the period 1994-97 are used to investigate the cost of political intervention in monetary policy. The paper finds that the difference between government bond yields in Germany (but not the US) and the UK was systematically related to an index of the credibility of monetary policy constructed on the basis of the frequency of agreements/ disagreements between the Minister of Finance who took the decisions on interest rates and the Bank of England, whose recommendations were published with a lag, with disagreements causing an increase in the yield differential. http://hdl.handle.net/10023/656 Abstract: This paper combines collective bargaining over wages and working time with models of endogenous and neoclassical growth. Public expenditure is funded by taxes on capital and labour supplied by infinitely-lived households in a closed economy. Taxes on labour are generally inefficient in both growth models, there is a “dynamic Laffer Curve”, and employment is increased by a reduction of working hours below the collective bargaining level – except in the case of a monopoly union. Although growth is maximised by competitive (efficient) hours, welfare-optimal working time is below the collective bargain when union are ‘too weak’, and vice-versa. Description: Previously in the University eprints HAIRST pilot service at http://eprints.st-andrews.ac.uk/archive/00000056/; Revised August 2001 2001-08-01T00:00:00Z FitzRoy, Felix Funke, Michael Nolan, Michael A. This paper combines collective bargaining over wages and working time with models of endogenous and neoclassical growth. Public expenditure is funded by taxes on capital and labour supplied by infinitely-lived households in a closed economy. Taxes on labour are generally inefficient in both growth models, there is a “dynamic Laffer Curve”, and employment is increased by a reduction of working hours below the collective bargaining level – except in the case of a monopoly union. Although growth is maximised by competitive (efficient) hours, welfare-optimal working time is below the collective bargain when union are ‘too weak’, and vice-versa. http://hdl.handle.net/10023/655 Abstract: While Rational Expectations have dominated the paradigm of expectations formation, they have been more recently challenged on the empirical ground such as, for instance, in the dynamics of the exchange rate. This challenge has led to the introduction of heterogeneous expectations in economic modeling. More specifically, the forecasts of the market participants have been drawn from competing views. Two behaviours are usually considered: agents are either fundamentalist or chartist. Moreover, the possibility of switching from one behaviour to the other one is also assumed. In a simple cobweb model, we study the dynamics associated with different endogenous switching process based on the path of prices. We provide an example with an asymmetric endogenous switching process built on the dynamics of past prices. This example confirms the widespread belief that fundamentalist market behaviour as compared with that of chartist tends to promote market stability. Description: Previously in the University eprints HAIRST pilot service at http://eprints.st-andrews.ac.uk/archive/00000057/ 2001-01-01T00:00:00Z Lasselle, Laurence Svizzero, Serge Tisdell, Clem While Rational Expectations have dominated the paradigm of expectations formation, they have been more recently challenged on the empirical ground such as, for instance, in the dynamics of the exchange rate. This challenge has led to the introduction of heterogeneous expectations in economic modeling. More specifically, the forecasts of the market participants have been drawn from competing views. Two behaviours are usually considered: agents are either fundamentalist or chartist. Moreover, the possibility of switching from one behaviour to the other one is also assumed. In a simple cobweb model, we study the dynamics associated with different endogenous switching process based on the path of prices. We provide an example with an asymmetric endogenous switching process built on the dynamics of past prices. This example confirms the widespread belief that fundamentalist market behaviour as compared with that of chartist tends to promote market stability. http://hdl.handle.net/10023/654 Abstract: The purpose of this paper is to give new insights of the method of Helleman (1980) in the context of macrodynamics. This method explains how a difference equation can be locally studied from the Feigenbaum equation in the case of a constant Jacobian matrix. First we introduce this technique. Second we apply it in two models: the model of Matsuyama (1999) and the model of Kaldor (1957). Finally we present an extension of the technique in the case of non constant (linear) Jacobian matrix and apply this extension in the model of Médio (1992). Description: Previously in the University eprints HAIRST pilot service at http://eprints.st-andrews.ac.uk/archive/00000059/ 2001-01-01T00:00:00Z Briec, Walter Lasselle, Laurence The purpose of this paper is to give new insights of the method of Helleman (1980) in the context of macrodynamics. This method explains how a difference equation can be locally studied from the Feigenbaum equation in the case of a constant Jacobian matrix. First we introduce this technique. Second we apply it in two models: the model of Matsuyama (1999) and the model of Kaldor (1957). Finally we present an extension of the technique in the case of non constant (linear) Jacobian matrix and apply this extension in the model of Médio (1992). http://hdl.handle.net/10023/653 Abstract: We consider an overlapping generation model based on Matsuyama (1999) and show that, whenever actual capital accumulation falls below its balanced growth path, subsidising innovators by taxing consumers has stabilising effects and increases welfare. Further, if the steady state is unstable under laissez faire, the introduction of the subsidy can make the steady state stable. Such a policy has positive welfare effects as it fosters output growth along the transitional adjustment path. Therefore, fast growing economies, in which high factor accumulation plays a crucial role alongside innovative sectors that enjoy temporary monopoly rents, should follow an unorthodox approach to stabilisation. Namely, taxing the consumers and reallocate resources to the innovative sectors. Description: Previously in the University eprints HAIRST pilot service at http://eprints.st-andrews.ac.uk/archive/00000060/ 2001-01-01T00:00:00Z Aloi, Marta Lasselle, Laurence We consider an overlapping generation model based on Matsuyama (1999) and show that, whenever actual capital accumulation falls below its balanced growth path, subsidising innovators by taxing consumers has stabilising effects and increases welfare. Further, if the steady state is unstable under laissez faire, the introduction of the subsidy can make the steady state stable. Such a policy has positive welfare effects as it fosters output growth along the transitional adjustment path. Therefore, fast growing economies, in which high factor accumulation plays a crucial role alongside innovative sectors that enjoy temporary monopoly rents, should follow an unorthodox approach to stabilisation. Namely, taxing the consumers and reallocate resources to the innovative sectors.