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The Working Papers are published once they have successfully come through an anonymous evaluation process. All documents published in this collection are available in electronic format. If they are not directly available through this website, copies can be requested from the Publications Unit.

We tasa tobin forex real interest rates, bounds on inflation tasa tobin forex and inflation risk premia in a CCAPM framework under four different preference specifications. Inflation risk premium terms are constant and small. Finally, inflation expectations react to movements in inflation trend though with some delay. Thus, agents seem to need "some" time to believe that a new inflation pattern reflects a permanent change.

These last two results are robust to the choice of household preferences. El trabajo muestra dos resultados importantes. En primer lugar, que el canal de competitividad es muy importante en el proceso de convergencia.

This paper provides empirical evidence on the effectiveness of movements in nominal exchange rates in smoothing cyclical imbalances between countries, as explained by the literature on optimal currency areas.

We use restrictions from the Mundell-Flemming model on which the theory of optimal currency areas is based to identify VAR systems that explain the exchange rate movements and the relative output movements of potential members of a European Monetary Union EMU. We find that the shocks that cause most of the variation in relative output do not seem to result in movements in nominal exchange rates.

Moreover, the shocks that explain movements in nominal exchange rates are monetary in nature, rather than real. Such results make it hard to argue that the loss of exchange rate flexibility accompanying EMU would come at a significant cost to macroeconomic stability. EU membership has become the primary goal for CEECs and the prospect of their eventual integration has already been taken into account by the European Tasa tobin forex.

In this context, the tasa tobin forex presents the substantial progress made on the macroeconomic stabilization as well as on the microliberalization and the institutional restructuring of the financial system. Against this background, the paper considers the challenges faced by CEECs' tasa tobin forex systems in the preparation for EU integration.

Two key areas of pressure on fiscal and monetary prudence exist: Also, it is still too soon even for those countries more advanced in the process of stabilization to lose autonomy in the management of exchange rate policy.

As a consequence, transition to participation in monetary union may take a long time and when it happens cannot be but gradual because of the different development of the potential member countries. We start by describing the current unemployment situation in the European Union EU. In so doing, we try to assess the relative importance of European, national, and regional-wide shocks in driving national and regional unemployment rates, and also to estimate the degree of real wage rigidity across EU countries.

We then discuss various factors which, in principle, may contribute towards tasa tobin forex the high and persistent EU unemployment rates, focusing on several labour market institutions like collective bargaining, job security legislation and unemployment benetits.

Tasa tobin forex tinal part of the paper analyses, in light of the **tasa tobin forex** evidence, the likely impact of EMU on European unemployment in the short and medium-term. We conclude that while the presently high European unemployment rates should not preclude EMU from being established, the operation of the monetary union will be smoother and its net economic benetits larger if Member countries succeed in tasa tobin forex those structural labour tasa tobin forex reforms which are needed for unemployment to go to lower, more reasonable rates.

**Tasa tobin forex** paper examines lending by a Genoese-led cartel to Philip II of Spain from the perspective of theory on sovereign debt. I find that a class of debt models which assumes lenders have an additional penalty beyond denying future credit accounts for the principal features of the episode. In particular, a version of Bulow and Rogoff b with asymmetric **tasa tobin forex** accounts for the Genoese's imposition of an embargo on payment transfers to Philip Il's Army of Flanders.

In addition, this model's predictions for debt tasa tobin forex corresponds to evidence on the Crown's debt ceiling and estimates of lower bounds on the value of the Genoese's penalty and the Crown's ability to repay.

Evidence from the episode goes against debt models that posit that implicit insurance is essential to the self-enforcement of sovereign debt: The nature of repeated interaction has been extensively studied in the repeated garne literature.

AbreuAbreu, Pearce and Stacchetti, and Tasa tobin forex and Luenberger develop a recursive approach to characterizing repeated games by focusing on the present values of subgame perfect strategies for each player, V. Judd and ConklinCronshaw and Rutherford and Cronshaw have implemented these techniques computationally.

Sorne of the **tasa tobin forex** interesting examples of strategic interaction, however, arise in environments with state variables in which the tasa tobin forex techniques cited aboye cannot be employed.

In such environments the set of values of subgame perfect equilibrium becomes a function of the state variable-the object of interest becomes the value correspondence. This paper presents a general method for computing value correspondences under perfect monitoring and discounting. Excessive levels of firing costs have been consistently blamed for the relatively weak employment performance in Europe, yet the conclusions to be drawn from the literature are somewhat tasa tobin forex.

This paper re-examines the impact of adjustment costs under uncertainty. It is shown that the interaction between the level tasa tobin forex adjustment costs and the type of uncertainty can have important ramifications for employment dynamics. We conclude the analysis with a number of simulation exercises to illustrate that allowing for changes in the economic environment in which firms have operated over the past two decades can considerably enhance our understanding of the evolution of employment within Europe.

In this paper we address the issue of the efficient estimation of the cointegrating vector in linear regression models with variables that follow general higher order and fractionally integrated processes. In this paper we develop a game-theoretic version of the right-to-manage model of firm-level bargaining where strategic interactions among firms are explicitly recognized.

Our main aim is to investigate how equilibrium wages and employment react to changes in various labor and product market variables. We show that our comparative statics results tasa tobin forex crucially on the strategic nature of the game, which in turn is determined by the relative bargaining power of unions and managers.

Exchange rate targets in a stabilization game are considered. The targeting strategy consists on the choice of a desired level for the exchange and the weight assigned to such target in the loss function. The exchange rate target appears then as an intermediate objective and acts as a surrogate to policy coordination. The targeting solution reveals that the targeting strategy can be embedded on a straight line in the policy-instruments space the respective money supplieswhich greatly facilitates the analysis.

It turns out that the targeting strategy is optimal when the reaction of the countries exert a positive externality on the other country. In this case, policymakers have some flexibility in the choice of the target as long as the optimal commitment to such target is selected accordingly.

The paper addresses the issue of the role of exchange rate jumps. The estimates point to an exchange rate characterized by a slow adjustment towards the tasa tobin forex equilibrium determined by relative prices in the tradable sector, while jumps accelerate this adjustment process.

Probit models relating the probability of such jumps to some tasa tobin forex fundamentals are also estimated. First, the model is assumed known, and the structure of the interpolation filter is analysed. Using the inverse or dual autocorrelation function it is seen how estimation of a missing observation is analogous to the removal of an outlier effect; tasa tobin forex problems are closely related with the signal plus noise decomposition of the series.

The results are extended to cover, first, the case of a missing observation near the two extemes of the series; then to the case of a sequence of missing observations, and finally to the general case of any number of sequences of any length of missing observations.

The optimal estimator can always be expressed, in a compact way, in terms of the dual autoco'i'relation function or a truncation thereof; its mean squared error is equal to the inverse of the appropriately chosen dual autocovariance matrix.

The last part of the paper illustrates a point of applied interest: When the model is unknown, the additive outlier approach may provide a convenient and efficient alternative to the standard Kalman filter-fixed point smoother approach for missing observations estimation.

This paper falls under the literature on weighted monetary aggregates that seeks to relax the assumption of perfect substitutability of assets implicit in the use tasa tobin forex traditioI. Specifically, using the methodology recently proposed by Feldstein and Stock, an estimation is made of those weights which, when applied to the broad aggregate components result in liquidity growth that is a stable leading indicator of nominal expenditure.

The weighted monetary aggregate obtained provides an acceptable measure of liquidity in the Spanish economy. This aggregate does not reflect a long-run tendency in the velocity of circulation, and the implied weights are consistent with the relative liquidity of its components: In turn, the weighted aggregate has more explanatory power for the growth in nominal expenditure than the traditional monetary aggregates.

This result also extends, albeit more weakly, to the explanatory power of inflation, measured in terms of the growth in the GDP deflator. Inflation has fallen dramatically in countries like Spain and Italy over the last decade, but the rate of increase in "home tasa tobin forex prices remains stubbornly higher than the rate of increase in "traded good" prices. The paper begins by showing that this discrepancy can be explained tasa tobin forex least in part by trends in productivity; average labour productivity has grown much more slowly in the home good sector in these countries.

The paper goes on to investigate the implications of productivity trends for the consistency of the Maastricht convergence criteria an for the differences in nation inflation rates after EMU.

The paper also discusses the difficulties some countries may have in meeting the convergence criteria, and some of the options open to them. The paper addresses the situation in which an economic variable, for which a series of observations is available, can be seen as the combination of several unobserved components UC. UC models have been intensively used in applied economic research; they are often found, for example, in business cycle analysis. UC are also important in short-term policy and monitoring of economic variables, and an important example is seasonal adjustment.

UC used in these two fields of applications applied econometric research and statistical practical applications often share the same basic structure.

This paper deals with ue models displaying that type of structure. First, the limitations of ad-hoc fixed filters are briefly discussed; attention is focussed on the Hodrick-Prescott filter to detrend a series, and on the Xll filter to seasonally adjust a series. The paper develops then a general set-up for a model-based approach common to the vast majority of UC model applications. The basic feature is that the components follow linear stochastic processes. The problems of model identification, estimation and forecast of the components, diagnosis, and inference are sequentially addressed.

The properties of the estimators preliminary and historical and of their associated estimation and forecasting errors are derived. Two examples are discussed: The paper contains some implications for applied econometric research. Two important ones are, first, that invertible models, such as AR or VAR models, **tasa tobin forex** in general be used to model seasonally adjusted or detrended data.

The second one is that to look at the business cycle in detrended series that are seasonally adjusted is a misleading procedure, since detrending plus seasonal adjustment will always induce a non-trivial spectral peak for a cyclical frequency. The paper deals with the problem of identifying stochastic unobserved twocomponent models, as in seasonal adjustment or trend-cycle decompositions.

Solutions based on the properties of the unobserved component tasa tobin forex error are considered, and analytical expressions for the variances and covariances of the different types of estimation errors errors in the final, preliminary. These expressions are relatively simple and straightforwardly derived from the ARlMA. It is shown that, in all cases, the estimation error tasa tobin forex is minimized at a canonical decomposition Le. On occasion, however, the most precise final estimator is obtained at a canonical decomposition different from the one that yields the most precise preliminary estimator.

Three examples illustrate tasa tobin forex results and the computational algorithms. The third example is a class of models often encountered in actual time series.

The paper deals with the statistical treatment of macroeconomic data for short-run economic analysis, monitoring and control. The main applications are short-term forecasting and unobserved components estimation, including trend and cycle estimation, and, most often, seasonal adjustment.

The paper briefly reviews some of the recent developments in the field, both at the methodological and applied levels. Then, it is argued that a fairly general approach, tasa tobin forex on signal extraction methods and ARlMA models, will gradually spread as the dominant tasa tobin forex.

The last section contains a word of caution, and illustrates the danger of applying these short-term statistical tools to long-term economic analysis. In this study it is attempted to estimate the amount of speculation in foreign exchange markets. Such an estimate is bard to make because it is theoretically as well as empirically difficult to delintitate specuJation in relation tasa tobin forex other activities.

In particular, the distinction between speculation and hedging is highly problematic.