Band 215, Heft 2

The Kaldorian macroeconomic theory of distribution is more or less ignored in our science, despite it has, in the view of the author, substantial explanatory power for real economics. It is not only able to explain (for equilibrium and disequilibrium situations) the distribution of macroeconomic income on wage and profit earners through the structure of the goods usage of the national product. Even more important, it explains the adjustment of private savings to the demand for investible funds (private net investments, public deficit and current account balances) through changes in the distribution and the level of national income. The empirical facts support this statement. If this adjustment-mechanism of savings (distributional mechanism) is of major importance for real economic correlations, the traditional theory needs substantial modifications: Each level of national product has numerous of equilibria. The theory of interest and the crowding-out-theory are inadequate. Furthermore the nominal wage policy of the unions and the consolidation policy of the government runs a risk to harm employees and the whole society.

Credit rationing was considered a severe problem for the quick privatisation of East German firms and for restructuring investments. It was argued that the higher the price for a firm the lower were the possible restructuring investments. However, this paper shows that this argument is not correct. Reducing the sales price attracts new buyers with riskier projects. For any given credit contract, this would lead to bank losses. To break even the banks therefore increase the equity-asset ratio. This reduces the funds available for restructuring investments. It turns out that the size of privatisation and the restructuring investments are entirely determined by the initial equity funds owned by potential buyers. However, a pure participation model, in combination with the taking over of the old debt of the East German firms by the Treuhandanstalt, would have been able to solve the problem of credit rationing for the privatisation of East German firms.

Based on a previous analysis for Western Germany the present paper examines the effects of increasing female labor supply on variations of the consumption structure in an international context. Using a microeconomic time allocation approach of private households, a standardized macroeconomic model is developed which explains aggregate demand components (services, durables, nondurables) for all analysed countries. This model allows for separating the traditional income effect from the removal effect (“monetization”), which is a result of an increasing female labor participation rate in that way that home production of goods and services has been changed into market demand. The empirical results for ten selected OECD-countries show significant differences of households propensity to remove home production.

The effects of stabilization policy and the impact of wage rigidities are analyzed for a small two-country currency area under the assumption of completely symmetrical demand sides and perfect capital mobility. It is shown that a different degree of wage rigidity within the area has a strong impact on the domestic income response to monetary and fiscal policy measures. While a country whose real wages are comparatively rigid benefits from a nominal appreciation of the joint exchange rate, accompanying a fiscal expansion, a country with a lower degree of real wage rigidity has an incentive to stimulate the domestic economy through a policy of nominal depreciation, such as a monetary expansion. Since both policy actions imply beggar-my-neighbor effects, different wage rigidities express an important reason for conflicts within a currency area and may eventually lead to its break-up. Zusammenfassung Die Auswirkungen stabilisierungspolitischer Maßnahmen und der Einfluß von Lohnrigiditäten in einer kleinen, aus zwei Ländern bestehenden Wechselkursunion werden unter der Annahme perfekter Kapitalmobilität und vollständig symmetrischer Nachfrageseiten untersucht. Es zeigt sich, daß ein unterschiedlicher Grad der Lohnrigidität innerhalb der Union die Reaktion des Inlandseinkommens auf geld- und fiskalpolitische Maßnahmen erheblich beeinflußt. Während ein Land mit vergleichsweise hoher Reallohnrigidität von einer nominalen Aufwertung des gemeinamen Wechselkurses, die eine expansive Fiskalpolitik begleitet, profitiert, besteht in einem Land mit geringerer Reallohnrigidität ein Anreiz, eine Politik der nominalen Abwertung in Form einer expansiven Geldpolitik zu betreiben. Da beide Maßnahmen beggar-my-neighbor-Effekte implizieren, stellen Unterschiede im Grad der Reallohnrigidität einen wesentlichen Grund für Konflikte innerhalb einer Wechselkursunion dar und können schließlich sogar zu ihrer Auflösung führen.

The negative transmission of fiscal policy among the members of an exchange rate union is a reason against the conduct of fiscal policy at the national level. Independent fiscal policies would act as asymmetric shocks for the union and cause a spiral of strategic reactions. This result must be qualified with respect to the economic dimension of the exchange rate union vis-à-vis the rest of the world. If the member countries are big, there exists a positive transmission of fiscal policy to the rest of the world in the case of flexible exchange rates and the external (positive) and internal (negative) spillover effects tend to offset each other. Zusammenfassung Die negative Übertragung von nationaler Fiskalpolitik auf die Mitgliedstaaten in einer Wechselkursunion ist ein Argument, das oft gegen die unkoordinierte Ausführung nationaler Fiskalpolitik angeführt wird. Unabgestimmte nationale Fiskalpolitiken wirken wie asymmetrische Schocks innerhalb der Wechselkursunion und können eine Spirale strategischer Reaktionen auslösen. Dieses Ergebnis muß jedoch modifiziert werden im Hinblick auf die relative Größe der Wechselkursunion in bezug auf den Rest der Welt. Im Fall einer großen Union und flexiblen Wechselkursen mit dem Rest der Welt besteht dorthin eine positive Übertragung der expansiven Fiskalpolitik. Dieser positive, externe Spillover-Effekt kann den internen, negativen Effekt aufwiegen.

This paper contains a microeconomic analysis of currency dumping which is traditionally considered a macroeconomic phenomenon. It is shown that due to the pass-through behaviour of producers in oligopolistic markets monetary exchange rate shocks may have real effects in form of currency dumping or predatory pricing. However, under current law only dumping is penalized in international markets. Producers’ symmetric behaviour is thus treated asymmetrically by law.

The study suggests the concept of the index of inconsistency as an appropriate index to judge the reliability of classification in classified surveys. The values of the index vary between 0 and 1; if the results of one main survey and one repetition show no variability of the individual answers regarding the assignment to specified size classes the index takes on the value of 0, if there is total unreliability of the answers the result is value 1. By an example of Belgian agricultural statistics a short report is given on the index of inconsistency calculated for a classified survey.

The present paper deals with the empirical performance of multivariate tests of the CAPM. These tests were developed to avoid the severe problems arising in the traditional two-pass regression approach. The results indicate that not all of the problems can be eliminated. In particular, the index problem that arises if an index portfolio is used instead of the unobservable market portfolio causes severe difficulties. Conclusions based on the tests can be misleading. In the last section an artificial capital market is generated. This financial market is in equilibrium and the CAPM is valid. The performance and problems are illustrated in several simulation studies.