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Bulletin
22/23 AUGUST/OCTOBER 1987
IN
THIS DOUBLE ISSUE...
In this double issue of the Bulletin, Colin Mayer describes the
preliminary results of a major CEPR research programme on 'The Provision
of Finance for Industry'. There are reports of conferences on the
economic impact of high levels of public debt in Italy; the use of
exchange rate and nominal income targets in macroeconomic policy-making;
historical perspectives on employers' strategies for the organization of
production and industrial relations; and analyses of 'North-South'
macroeconomic interactions. There are also details of two recent
publications. Economic Policy and Technological Performance, edited by
Partha Dasgupta and Paul Stoneman, contains the proceedings of a 1986
conference on 'The Economics of Technology Policy'. Economic Policy No.
5 is a special issue devoted to an assessment of 'The New Conservative
Revolution' in economic policy during the 1980s.
Commitment:
The Missing Link?
What factors can explain cross-country differences in patterns of
corporate finance? Colin Mayer argues that traditional explanations,
such as those which emphasize taxation, have proved unsatisfactory. The
process of corporate restructuring provides a clue to the missing link -
the importance of commitment.
The Italian Experience
Public debt in Italy is almost equal to GDP. Is this a cause for
concern? A recent conference examined the lessons that could be drawn
from the Italian experience.
Macroeconomic Policy and Targets
A July CEPR conference examined the prospects for successful
macroeconomic management based on nominal income and exchange rate
targets.
'North-South' Interactions
Macroeconomic interactions between 'North' and 'South' have received
less attention than interdependence among the Northern economies. A
recent conference analysed the importance for the global economy of
linkages through commodity prices, LDC debt, and developed countries'
fiscal policies.
Employment Strategies
A September conference discussed both historical and international
comparisons of the approaches adopted by employers to production
organization and industrial relations.
Lunchtime Meetings
Alexander Swoboda launched the CEPR/ICMBS volume on Threats
to International Financial Stability
at a July meeting.
Colin Mayer described his recent research on the financing of corporate
takeovers,
which sought to explain the surprisingly different performances of
cash-financed and equity-financed acquisitions.
Jacques Melitz urged that now was the time for sterling
to enter the European Monetary System;
most of the standard arguments against membership were misguided.
Patrick Minford argued that the combination of government intervention
in the housing market and the system of unemployment benefits
exacerbated the 'North-South'
divide in Britain.
Paul Stoneman launched CEPR's latest book at an October meeting: he
discussed the role of government policy in encouraging the diffusion
of new technologies.
George Alogoskoufis warned that adoption of nominal
income targets
was unlikely to improve UK macroeconomic performance. Such targets would
do little to counteract supply shocks, which were an important source of
fluctuations in the UK economy.
Discussion Papers
Papers by Tim
Hatton and
by Barry
Eichengreen
on interwar unemployment in Britain.
Christian Wolff on the use of forward rates in forecasting future
movements in exchange rates.
Papers on the gains from and sustainability of international policy
coordination, by Gerry
Holtham and Andrew Hughes Hallett;
by
David Currie, Paul Levine and Nic Vidalis;
and by Patrick
Minford and Matthew Canzoneri.
Seppo Honkapohja on the use of 'probabilistic anticipations' in designing
fiscal policy.
Christopher Bliss and Vijay Joshi on the use of exchange
rate devaluation
as a protectionist device, and Louka Katseli on the effectiveness
of devaluation
to lower the real exchange rate.
Assar Lindbeck and Dennis Snower on 'insider-outsider'
models of
labour market behaviour.
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