Bulletin 18 December 1986

IN THIS ISSUE...

Macroeconomic policy coordination has featured prominently in recent international (economic) discussions; this issue of the Bulletin is therefore particularly timely. At a November CEPR conference, economists discussed recent advances in the analysis of international economic policy coordination, focusing on the choice of international monetary 'regimes' and the evaluation of policy rules within these regimes. The Bulletin reports lunchtime meetings on European macro policies, the operation of the EMS international financial crises, and anti-inflationary 'shock treatments' in Latin America and Israel.

International Regimes and Policy Design
The design of a new international monetary regime has been the focus of renewed attention by economists and policy-makers in recent years. Participants at a November conference took stock of recent advances in this area and discussed the agenda for future research.

European Macroeconomic Policies
At a lunchtime meeting in November, Gilles Oudiz described how the multiplicity of European policy-makers policy preferences had led to excessively deflationary policies in Europe.

International Financial Crises
Does the 1930s, the last period of major financial disruption, offer useful lessons for the 1980s? Barry Eichengreen and Richard Portes compared the two periods on the basis of a proposed anatomy of financial crises.

Household Formation
Kathleen Kiernan explored changing patterns of household and family formation in the United Kingdom. She argued that a shift towards consensual unions represented postponement, not rejection of marriage.

Stabilization Programmes
Sweder van Wijnbergen compared 'shock treatments' of hyperinflation in Israel and Latin America early experience suggested that 'heterodox' policies, which included wage and price controls, reduced the output costs of disinflation.

European Monetary System
Francesco Giavazzi contended that 'asymmetry' was the key to the operation of the EMS. Membership added credibility to the policies of higher-inflation countries, because of the Bundesbank's commitment to sound money.

UK Housing Supply
Michael Murphy described the important relationships between the pattern of housing and demographic behaviour provision in Britain.

Discussion Papers

Willem Buiter demonstrates that a gold standard cannot operate automatically; its survival requires policies which respond flexibly to economic shocks. In another paper, he argues that statistical concepts of causality provide no guide to the effectiveness of economic policy.

Aman Ullah and Adrian Pagan examine the use of measures of risk in econometric estimation .

Willem Buiter shows that fiscal policy can influence the economy even if the government balances its budget. In another paper, he explores the implications of public sector solvency constraints for exchange rate management.

Barry Eichengreen and Richard Portes compare the international financial conditions of the 1930s with those prevailing today.

Steven Tolliday and Jonathan Zeitlin discuss the effects on the automobile industry of changing technology and market conditions.

Ravi Kanbur suggests a way to estimate the impact of adjustment policies on income distribution and poverty in LDCs .

Assar Lindbeck and Dennis Snower contrast the 'efficiency-wage' and 'insider-outsider' explanations of unemployment .

Robert Gordon argues that European wages, prices and productivity behave similarly to those in the United States and Japan.

Francesco Giavazzi and Marco Pagano explore why high-inflation countries might willingly submit to the monetary discipline of the EMS.

Barry Eichengreen and Charles Wyplosz argue that the French economic growth in the late 1920s was sparked by domestic investment not exports.

Alasdair Smith analyses the effects of trade policy on direct investment by multinationals.

Forthcoming Events
The Centre is organizing lunchtime meetings on stock market myopia and on West German macro policy, and workshops on performance in financial markets and on European interdependence (and macroeconomic policy). The series of meetings on demographic research continues, with talks on old age, female economic dependence, and education policy.