Estimating Monetary Policy Rules for South Africa
Tobias Knedlik
South African Journal of Economics,
2006
Abstract
The paper combines the estimation of the Monetary Conditions Index (MCI) with the theoretic modelling of optimal monetary policy in South Africa. The idea that monetary policy is not only interested in optimal monetary conditions but also in external stability, provides the basis for the analysis. The paper introduces the concept of the MCI and estimates the relative influence of interest rates and exchange rates on the output gap. The estimated weights are 1.9:1. This estimation result is used to specify operating target rules for South African monetary policy.
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Macroeconomic Factors and Microlevel Bank Behavior
Claudia M. Buch, S. Eickmeier, Esteban Prieto
Journal of Money, Credit and Banking,
No. 4,
2014
Abstract
We analyze the link between banks and the macroeconomy using a model that extends a macroeconomic VAR for the U.S. with a set of factors summarizing conditions in about 1,500 commercial banks. We investigate how macroeconomic shocks are transmitted to individual banks and obtain the following main findings. Backward-looking risk of a representative bank declines, and bank lending increases following expansionary shocks. Forward-looking risk increases following an expansionary monetary policy shock. There is, however, substantial heterogeneity in the transmission of macroeconomic shocks, which is due to bank size, capitalization, liquidity, risk, and the exposure to real estate and consumer loans.
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Consequences of the US-subprime Crisis Dampen Economic Growth in Germany
Wirtschaft im Wandel,
1. Sonderausgabe
2008
Abstract
The crises of the housing and the financial sector in the US and the turmoil on worldwide financial markets have clouded the prospects of the world economy for this and next year. In particular, conditions for financing consumption and investment will worsen. In addition, the price hikes for energy and food entail a redistribution of purchasing power from ordinary households to the producers of these goods. As a consequence of all this, the economy in the US will be more or less stagnating this year, and world growth will slow down. Firms in the nonfinancial sector, however, are generally in good financial condition, policy in the US takes strong measures to contain the crisis, and growth dynamics in emerging markets economies appear to be robust enough to withstand the dampening effects. In Germany, the economy is, in spite of the adverse effects from abroad and in particular the strong appreciation of the euro, still in good shape. Apparently, the economy has become more robust in the past years, partly due to increased competitiveness of German producers. Still, economic expansion will slow down, with annual growth rates of 1.8% for this year and 1.4% for 2009.
For the first time the forecast of the institutes comprises a medium term projection. For this, the potential growth rate of the German Economy is estimated to be 1.6%. As to policy recommendations, the institutes advise against the establishment of minimum wages in Germany, because they fear adverse effects for employment. In this point the IWH and its partners take a different view.
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Switching to Exchange Rate Flexibility? The Case of Central and Eastern European Inflation Targeters
Andrej Drygalla
FIW Working Paper, Nr. 139,
No. 139,
2015
Abstract
This paper analyzes changes in the monetary policy in the Czech Republic, Hungary, and Poland following the policy shift from exchange rate targeting to inflation targeting around the turn of the millennium. Applying a Markovswitching dynamic stochastic general equilibrium model, switches in the policy parameters and the volatilities of shocks hitting the economies are estimated and quantified. Results indicate the presence of regimes of weak and strong responses of the central banks to exchange rate movements as well as periods of high and low volatility. Whereas all three economies switched to a less volatile regime over time, findings on changes in the policy parameters reveal a lower reaction to exchange rate movements in the Czech Republic and Poland, but an increased attention to it in Hungary. Simulations for the Czech Republic and Poland also suggest their respective central banks, rather than a sound macroeconomic environment, being accountable for reducing volatility in variables like inflation and output. In Hungary, their favorable developments can be attributed to a larger extent to the reduction in the size of external disturbances.
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Vierteljährliche Konjunkturberichterstattung für das Land Sachsen-Anhalt - Die gesamtwirtschaftliche Lage im 2. Quartal 2014 -
Brigitte Loose, Hans-Ulrich Brautzsch, Franziska Exß
IWH Online,
No. 6,
2014
Abstract
Das Bruttoinlandsprodukt in Sachsen-Anhalt hat nach indikatorgestützten Schätzungen im zweiten Quartal 2014 deutlich nachgegeben, nachdem es zum Jahresanfang kräftig gestiegen war. Dass dem – dank eines ungewöhnlich milden Winterwetters – überzeichneten Produktionsanstieg im ersten Quartal eine Gegenkorrektur im Frühjahr folgen wird, war zu erwarten gewesen. Allerdings fiel der Rückgang mit 1% stärker aus als die Expansion um 0,7% Anfang des Jahres. Anders in Deutschland insgesamt: Hier folgte einer Ausweitung der gesamtwirtschaftlichen Produktion um 0,8% ein Rückgang von 0,2%. Diese Konstellation spiegelt sich auch in den Vorjahresvergleichen wider: Während die Wirtschaft in Sachsen-Anhalt gegenüber dem ohnehin schwachen ersten Halbjahr des Vorjahres nur leicht zugelegt hat (0,5%), ergibt sich für die deutsche Wirtschaft ein mehr als dreimal so hoher Anstieg (1,7%).
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Vierteljährliche Konjunkturberichterstattung für das Land Sachsen-Anhalt - Die gesamtwirtschaftliche Lage im 3. Quartal 2015 -
Brigitte Loose, Hans-Ulrich Brautzsch, Franziska Exß
IWH Online,
No. 12,
2015
Abstract
Die gesamtwirtschaftliche Produktion in Sachsen-Anhalt ist nach den indikatorgestützten
Schätzungen des IWH im dritten Quartal des Jahres 2015 um 0,4% zurückgegangen, nachdem sie im Quartal zuvor kräftig zugelegt hatte. Damit blieb die Expansion im laufenden Quartal deutlich hinter der in Deutschland zurück.
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Vierteljährliche Konjunkturberichterstattung für das Land Sachsen-Anhalt - Die gesamtwirtschaftliche Lage im 4. Quartal 2014 -
Brigitte Loose, Hans-Ulrich Brautzsch, Franziska Exß
IWH Online,
No. 2,
2015
Abstract
Das Bruttoinlandsprodukt in Sachsen-Anhalt hat nach den indikatorgestützten Schätzungen des IWH im Schlussquartal des Jahres 2014 mit einer Rate von 0,6% vergleichsweise kräftig zugenommen. Dieser Zuwachs entspricht in etwa dem der gesamtwirtschaftlichen Produktion in Deutschland insgesamt und auch in Ostdeutschland. Nach der Schwäche im Sommerhalbjahr, die zum einen auf Sondereffekten und zum anderen auf konjunkturbedingten Rückschlägen beruhte, konnte insbesondere das Verarbeitende Gewerbe wieder deutlich aufholen. Die Mineralölproduktion wurde nach den außerordentlich kräftigen wartungsbedingten Produktionsausfällen im Frühjahr nun bereits das zweite Quartal in Folge mit einer zweistelligen Rate ausgeweitet. Die Bauproduktion legte angesichts des ausgesprochen milden Winterwetters und hoher Auftragsbestände deutlich zu. Davon profitierten auch baustoffnahe Branchen des Verarbeitenden Gewerbes. Gleichzeitig konnten die Investitions- und Verbrauchsgüterhersteller mit der wieder anziehenden Weltkonjunktur höhere Absätze im Ausland erzielen. Die Wertschöpfung im Handel nahm nach zum Teil hohen Umsatzverlusten in den drei Quartalen zuvor ebenfalls wieder zu; hier dürfte wohl die Entlastung der Budgets der privaten Haushalte aufgrund der niedrigen Inflation eine entscheidende Rolle gespielt haben. Diesen positiven Impulsen wirkt nach wie vor ein leichter Rückgang bei den öffentlichen Dienstleistern aufgrund des Konsolidierungskurses entgegen.
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Isolation and Innovation – Two Contradictory Concepts? Explorative Findings from the German Laser Industry
Wilfried Ehrenfeld, T. Pusch, Muhamed Kudic
IWH Discussion Papers,
No. 1,
2015
Abstract
We apply a network perspective and study the emergence of core-periphery (CP) structures in innovation networks to shed some light on the relationship between isolation and innovation. It has been frequently argued that a firm’s location in a densely interconnected network area improves its ability to access information and absorb technological knowledge. This, in turn, enables a firm to generate new products and services at a higher rate compared to less integrated competitors. However, the importance of peripheral positions for innovation processes is still a widely neglected issue in literature. Isolation may provide unique conditions that induce innovations which otherwise may never have been invented. Such innovations have the potential to lay the ground for a firm’s pathway towards the network core, where the industry’s established technological knowledge is assumed to be located.
The aim of our paper is twofold. Firstly, we propose a new CP indicator and apply it to analyze the emergence of CP patterns in the German laser industry. We employ publicly funded Research and Development (R&D) cooperation project data over a period of more than two decades. Secondly, we explore the paths on which firms move from isolated positions towards the core (and vice versa). Our exploratory results open up a number of new research questions at the intersection between geography, economics and network research.
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Database on competition law enactment in developing countries, the budget and staff of the relevant competition agency, and other structural (economic and otherwise) characteristics. Forschungsbericht innerhalb des EU-Projektes: Competition Policy Foundations for Trade Reform, Regulatory Reform, and Sustainable Development, 2005
Johannes Stephan, Franz Kronthaler
One-off Publications,
No. 4,
2005
Abstract
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Threshold for employment and unemployment. A spatial analysis of German RLM's 1992-2000
Christian Dreger, Reinhold Kosfeld
External Publications,
2006
Abstract
Changes in production and employment are closely related over the course of the business cycle. However, as exemplified by the laws of Verdoorn (1949, 1993) and Okun (1962, 1970), thresholds seem to be present in the relationship. Due to capacity reserves of the firms, output growth must exceed certain levels for the creation of new jobs or a fall in the unemployment rate. While Verdoorn's law focuses on the growth rate of output sufficient for an increase in employment, in Okun's law, the fall in the unemployment rate becomes the focus of attention. In order to assess the future development of employment and unemployment, these thresholds have to be taken into account. They serve as important guidelines for policymakers. In contrast to previous studies, we present joint estimates for both the employment and unemployment threshold. Due to demographic patterns and institutional settings on the labour market, the two thresholds can differ, implying that minimum output growth needed for a rise in employment may not be sufficient for a simultaneous drop in the unemployment rate. Second, regional information is considered to a large extent. In particular, the analysis is carried out using a sample of 180 German regional labour markets, see Eckey (2001). Since the cross-sections are separated by the flows of job commuters, they correspond to travel-to-work areas. Labour mobility is high within a market, but low among the entities. As the sectoral decomposition of economic activities varies across the regions, the thresholds are founded on a heterogeneous experience, leading to more reliable estimates.The contribution to the literature is twofold. First, to the best of our knowledge, no previous paper has investigated a similar broad regional dataset for the German economy as a whole before. By using a panel dataset, information on the regional distributions around the regression lines as well as theirs positional changes is provided for each year. Second, the methods applied are of new type. They involve a mixture of pooled and spatial econometric techniques. Dependencies across the regions may result from common or idiosyncratic (region specific) shocks. In particular, the eigenfunction decomposition approach suggested by Griffith (1996, 2000) is used to identify spatial and non-spatial components in regression analysis. As the spatial pattern may vary over time, inference is conducted on the base of a spatial SUR model. Due to this setting, efficient estimates of the thresholds are obtained. With the aid of a geographic information system (GIS) variation of the spatial components can be made transparent. With Verdoorn’s and Okun’s law the figures show some significant patterns become obvious over time. In respect to Verdoorn’s law, for instance, a stripe of high values in the north-western part from Schleswig-Holstein via Lower Saxony and North Rhine Westfalia to Rhineland Palatinate is striking in all years but 1994 and 1995. In most periods the spatial component is likewise concentrated in Saxony. Clusters of low values can be found in northern Bavaria and, in some periods, in Thüringen and Mecklenburg-Vorpommern. Other parts of Germany appear to be more fragmented consisting of relative small clusters of low, medium and high values of the spatial component. With Okun’s law some changing spatial patterns arise. In all, spatially filtering provides valuable insights into the spatial dimensions of the laws of Verdoorn and Okun.
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