Pub Date : 2021-12-01DOI: 10.4337/ejeep.2021.03.02
M. Watts
This paper is critical of the conceptual foundations and methodology adopted by Smithin (2020) in his exploration of the impact of different interest-rate policy rules on inflation. His modelling framework is too narrow to adequately discriminate between different interest-rate rules in terms of their broader macroeconomic impacts.
{"title":"The methodology for assessing interest-rate policy rules: some comments","authors":"M. Watts","doi":"10.4337/ejeep.2021.03.02","DOIUrl":"https://doi.org/10.4337/ejeep.2021.03.02","url":null,"abstract":"This paper is critical of the conceptual foundations and methodology adopted by Smithin (2020) in his exploration of the impact of different interest-rate policy rules on inflation. His modelling framework is too narrow to adequately discriminate between different interest-rate rules in terms of their broader macroeconomic impacts.","PeriodicalId":44368,"journal":{"name":"European Journal of Economics and Economic Policies-Intervention","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2021-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86304306","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-12-01DOI: 10.4337/ejeep.2021.03.03
John Smithin
This note is a brief reply to Watts (2021), who has been critical of the conceptual foundations and methodology in a discussion of the impact of different interest rate policy rules on inflation in Smithin (2020). The reply concludes that the case for a ‘zero real policy rate of interest’ (ZRPR), rather than a ‘zero interest rate policy’ (ZIRP), emerges unscathed.
{"title":"The methodology for assessing interest-rate policy rules: a reply","authors":"John Smithin","doi":"10.4337/ejeep.2021.03.03","DOIUrl":"https://doi.org/10.4337/ejeep.2021.03.03","url":null,"abstract":"This note is a brief reply to Watts (2021), who has been critical of the conceptual foundations and methodology in a discussion of the impact of different interest rate policy rules on inflation in Smithin (2020). The reply concludes that the case for a ‘zero real policy rate of interest’ (ZRPR), rather than a ‘zero interest rate policy’ (ZIRP), emerges unscathed.","PeriodicalId":44368,"journal":{"name":"European Journal of Economics and Economic Policies-Intervention","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2021-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"90683352","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-09-23DOI: 10.4337/ejeep.2021.02.04
J. Behringer, S. Gechert, H. Herr, J. Priewe, H. Joebges, A. Watt
{"title":"Editorial to the special issue","authors":"J. Behringer, S. Gechert, H. Herr, J. Priewe, H. Joebges, A. Watt","doi":"10.4337/ejeep.2021.02.04","DOIUrl":"https://doi.org/10.4337/ejeep.2021.02.04","url":null,"abstract":"","PeriodicalId":44368,"journal":{"name":"European Journal of Economics and Economic Policies-Intervention","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2021-09-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81954085","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-09-23DOI: 10.4337/ejeep.2021.02.06
De Paula
This paper examines the Brazilian economy during the COVID-19 pandemic and the economic policies implemented in 2020 to address the economic and social crisis. Using primary and secondary sources, the article differs in its analysis from other heterodox approaches according to which state action in response to the pandemic crisis in Brazil was weak and inconsistent. It is argued that counter-cyclical actions, especially those relating to emergency aid, have had a strong counter-cyclical effect on the economy and on reducing poverty and social inequality, even though there was no strategy previously coordinated by the federal government. The article concludes that the poor outlook for the Brazilian economy relates to both the resumption of orthodox policies and the unleashing of a second wave of the COVID-19 pandemic, both contributing to a slow recovery of the Brazilian economy.
{"title":"The COVID-19 crisis and counter-cyclical policies in Brazil","authors":"De Paula","doi":"10.4337/ejeep.2021.02.06","DOIUrl":"https://doi.org/10.4337/ejeep.2021.02.06","url":null,"abstract":"This paper examines the Brazilian economy during the COVID-19 pandemic and the economic policies implemented in 2020 to address the economic and social crisis. Using primary and secondary sources, the article differs in its analysis from other heterodox approaches according to which state action in response to the pandemic crisis in Brazil was weak and inconsistent. It is argued that counter-cyclical actions, especially those relating to emergency aid, have had a strong counter-cyclical effect on the economy and on reducing poverty and social inequality, even though there was no strategy previously coordinated by the federal government. The article concludes that the poor outlook for the Brazilian economy relates to both the resumption of orthodox policies and the unleashing of a second wave of the COVID-19 pandemic, both contributing to a slow recovery of the Brazilian economy.","PeriodicalId":44368,"journal":{"name":"European Journal of Economics and Economic Policies-Intervention","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2021-09-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"75764032","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-09-01DOI: 10.4337/ejeep.2021.02.08
Laike Yang, Bo Xu
To contain the COVID-19 pandemic, medical products play an important role around the world. This paper studies the relationship between trade and pandemic control by testing the impact of importing medical products from China on COVID-19 cases and deaths. Using a fixed-effects model, we find that there is a significant negative correlation between imports of medical products from China and COVID-19 cases; for every 1 percent increase in protection equipment imported from China, new COVID-19 cases per day drop by 0.24 percent, and COVID-19-related deaths decrease by 0.13 percent in two weeks. The evidence suggests that trade can play a vital role in fighting the pandemic.
{"title":"Can trade help with fighting the pandemic? Evidence from imports of Chinese medical products","authors":"Laike Yang, Bo Xu","doi":"10.4337/ejeep.2021.02.08","DOIUrl":"https://doi.org/10.4337/ejeep.2021.02.08","url":null,"abstract":"To contain the COVID-19 pandemic, medical products play an important role around the world. This paper studies the relationship between trade and pandemic control by testing the impact of importing medical products from China on COVID-19 cases and deaths. Using a fixed-effects model, we find that there is a significant negative correlation between imports of medical products from China and COVID-19 cases; for every 1 percent increase in protection equipment imported from China, new COVID-19 cases per day drop by 0.24 percent, and COVID-19-related deaths decrease by 0.13 percent in two weeks. The evidence suggests that trade can play a vital role in fighting the pandemic.","PeriodicalId":44368,"journal":{"name":"European Journal of Economics and Economic Policies-Intervention","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2021-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77702485","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-09-01DOI: 10.4337/ejeep.2021.02.11
M. Lavoie
{"title":"Book review: Cesaratto, Sergio (2020): Heterodox Challenges in Economics: Theoretical Issues and the Crisis of the Eurozone, Cham, Switzerland (277 pages, Springer, softcover, ISBN 978-3-030-54447-8; also available as an ebook)","authors":"M. Lavoie","doi":"10.4337/ejeep.2021.02.11","DOIUrl":"https://doi.org/10.4337/ejeep.2021.02.11","url":null,"abstract":"","PeriodicalId":44368,"journal":{"name":"European Journal of Economics and Economic Policies-Intervention","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2021-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"90924946","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-09-01DOI: 10.4337/ejeep.2021.02.03
J. Priewe
While the European Union (EU) fiscal rules are suspended in the years 2020–2022, new rules are in the making and might be activated in 2023. If the old rules were used again, massive austerity would be required in the face of the strongly elevated level of public debt and the gap to the 60 per cent debt cap in the EU Treaty. A new proposal is suggested in this article which requires only small changes in the Treaty and/or the Fiscal Compact, but a strong overhaul in secondary law, that is, the Stability and Growth Pact. The key ideas are to use net interest payments, as a share of GDP, as the new metric for defining debt sustainability rather than gross public debt. This would allow the adjustment of the rules to changing monetary environments, especially interest-rate levels, and changing differentials between interest rates and growth rates. This way, much more fiscal space would be generated both for higher-debt and lower-debt member states and the entire euro area.
{"title":"Searching for new fiscal rules in the euro area: a new proposal","authors":"J. Priewe","doi":"10.4337/ejeep.2021.02.03","DOIUrl":"https://doi.org/10.4337/ejeep.2021.02.03","url":null,"abstract":"While the European Union (EU) fiscal rules are suspended in the years 2020–2022, new rules are in the making and might be activated in 2023. If the old rules were used again, massive austerity would be required in the face of the strongly elevated level of public debt and the gap to the 60 per cent debt cap in the EU Treaty. A new proposal is suggested in this article which requires only small changes in the Treaty and/or the Fiscal Compact, but a strong overhaul in secondary law, that is, the Stability and Growth Pact. The key ideas are to use net interest payments, as a share of GDP, as the new metric for defining debt sustainability rather than gross public debt. This would allow the adjustment of the rules to changing monetary environments, especially interest-rate levels, and changing differentials between interest rates and growth rates. This way, much more fiscal space would be generated both for higher-debt and lower-debt member states and the entire euro area.","PeriodicalId":44368,"journal":{"name":"European Journal of Economics and Economic Policies-Intervention","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2021-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82857711","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-09-01DOI: 10.4337/ejeep.2021.02.05
P. Bofinger
A revision of the European Central Bank's (ECB) strategy is urgently needed. For the new strategy, it is important to define the inflation target explicitly in symmetrical terms. Environmental policy objectives can in principle be reconciled with the ECB's mandate as long as they do not conflict with the objective of monetary stability. An essential element of any strategy is a heuristic that makes it relatively easy for the public to monitor whether monetary policy decisions are in line with the mandate. Among the possible heuristics, monetary targeting and the Taylor rule have to be ruled out while ‘inflation targeting’ offers a relatively simple navigation system for monetary policy discussions.
{"title":"The European Central Bank: the time is ripe for a major revision of its strategy","authors":"P. Bofinger","doi":"10.4337/ejeep.2021.02.05","DOIUrl":"https://doi.org/10.4337/ejeep.2021.02.05","url":null,"abstract":"A revision of the European Central Bank's (ECB) strategy is urgently needed. For the new strategy, it is important to define the inflation target explicitly in symmetrical terms. Environmental policy objectives can in principle be reconciled with the ECB's mandate as long as they do not conflict with the objective of monetary stability. An essential element of any strategy is a heuristic that makes it relatively easy for the public to monitor whether monetary policy decisions are in line with the mandate. Among the possible heuristics, monetary targeting and the Taylor rule have to be ruled out while ‘inflation targeting’ offers a relatively simple navigation system for monetary policy discussions.","PeriodicalId":44368,"journal":{"name":"European Journal of Economics and Economic Policies-Intervention","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2021-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86309766","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-08-16DOI: 10.4337/ejeep.2021.02.10
A. Herrero
2020 was a terrible year for Asia but for some countries less than for others. Countries recovered divergently with some managing to grow positively notwithstanding the pandemic, namely mainland China, Taiwan, and Vietnam. The rest of Asia had a hard time, facing problems such as current-account deficit, tourism reliance, and limited fiscal and monetary space. This article discusses the unevenness of COVID-19 and the divergent recovery of Asian economies in the post-COVID-19 era.
{"title":"Post-COVID-19 Asia will grow strongly in 2021 but structural problems continue to pile up","authors":"A. Herrero","doi":"10.4337/ejeep.2021.02.10","DOIUrl":"https://doi.org/10.4337/ejeep.2021.02.10","url":null,"abstract":"2020 was a terrible year for Asia but for some countries less than for others. Countries recovered divergently with some managing to grow positively notwithstanding the pandemic, namely mainland China, Taiwan, and Vietnam. The rest of Asia had a hard time, facing problems such as current-account deficit, tourism reliance, and limited fiscal and monetary space. This article discusses the unevenness of COVID-19 and the divergent recovery of Asian economies in the post-COVID-19 era.","PeriodicalId":44368,"journal":{"name":"European Journal of Economics and Economic Policies-Intervention","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2021-08-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"78669802","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In this paper, I explain theoretically the coordination and conflict scheme of fiscal and monetary policy workings, and then empirically assess the effect of both inflation-targeting and non-inflation-only targeting policies on inflation and unemployment rates. I employ a difference-in-difference method to estimate the impact on inflation, the unemployment rate, and their volatilities in both 10 inflation-targeting (single-mandate) and 11 non-inflation-targeting (multiple-mandate) countries specifically from the sample of developing economies over the period from 1998 to 2018. Our key findings show that while the inflation-targeting countries effectively present a reduction in inflation and inflation volatility, the effects on the unemployment rate are negligible, while unemployment volatility is higher in the period 1998–2008. Finally, the paper argues that the unemployment rate should be used as a natural second target in a typical emerging-market economy case.
{"title":"Political economy of central-bank mandates in developing countries","authors":"Z. Ybrayev","doi":"10.4337/EJEEP.2021.0078","DOIUrl":"https://doi.org/10.4337/EJEEP.2021.0078","url":null,"abstract":"In this paper, I explain theoretically the coordination and conflict scheme of fiscal and monetary policy workings, and then empirically assess the effect of both inflation-targeting and non-inflation-only targeting policies on inflation and unemployment rates. I employ a difference-in-difference method to estimate the impact on inflation, the unemployment rate, and their volatilities in both 10 inflation-targeting (single-mandate) and 11 non-inflation-targeting (multiple-mandate) countries specifically from the sample of developing economies over the period from 1998 to 2018. Our key findings show that while the inflation-targeting countries effectively present a reduction in inflation and inflation volatility, the effects on the unemployment rate are negligible, while unemployment volatility is higher in the period 1998–2008. Finally, the paper argues that the unemployment rate should be used as a natural second target in a typical emerging-market economy case.","PeriodicalId":44368,"journal":{"name":"European Journal of Economics and Economic Policies-Intervention","volume":null,"pages":null},"PeriodicalIF":0.6,"publicationDate":"2021-04-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"90798209","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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