Pub Date : 2024-08-26DOI: 10.1057/s41294-024-00244-y
Alexander Rathke, Tobias Straumann, Jan-Egbert Sturm
This special issue of Comparative Economic Studies, commemorating fifty years since the end of the Bretton Woods system, examines the adjustment of small open economies to floating exchange rates and new monetary policy frameworks. Based on a workshop held at the KOF Swiss Economic Institute in June 2023, six papers analyse dimensions such as the evolution of monetary policy regimes, the impact of economic crises and the use of unconventional monetary policies in Canada, Israel, Norway, Sweden and Switzerland. The findings highlight the benefits and limitations of inflation targeting, the challenges of global financial integration and the strategic responses of central banks to maintain stability and independence, providing policymakers with valuable insights into the complex dynamics of monetary policy in the post-Bretton Woods era.
{"title":"Editorial for the Special Issue of Comparative Economic Studies: 50 Years After the End of Bretton Woods—The Experiences of Small Open Economies","authors":"Alexander Rathke, Tobias Straumann, Jan-Egbert Sturm","doi":"10.1057/s41294-024-00244-y","DOIUrl":"https://doi.org/10.1057/s41294-024-00244-y","url":null,"abstract":"<p>This special issue of Comparative Economic Studies, commemorating fifty years since the end of the Bretton Woods system, examines the adjustment of small open economies to floating exchange rates and new monetary policy frameworks. Based on a workshop held at the KOF Swiss Economic Institute in June 2023, six papers analyse dimensions such as the evolution of monetary policy regimes, the impact of economic crises and the use of unconventional monetary policies in Canada, Israel, Norway, Sweden and Switzerland. The findings highlight the benefits and limitations of inflation targeting, the challenges of global financial integration and the strategic responses of central banks to maintain stability and independence, providing policymakers with valuable insights into the complex dynamics of monetary policy in the post-Bretton Woods era.</p>","PeriodicalId":46161,"journal":{"name":"Comparative Economic Studies","volume":null,"pages":null},"PeriodicalIF":0.8,"publicationDate":"2024-08-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142194175","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 : 2024-08-02DOI: 10.1057/s41294-024-00242-0
Alexander Rathke, Tobias Straumann
The paper investigates the monetary policy of the Swiss National Bank (SNB) in the post-Bretton Woods era, shedding light on the dynamics between the SNB and the Bundesbank and its successor, the European Central Bank, respectively. Our econometric analysis shows a high degree of synchronisation between the SNB’s interest rate changes and the decisions made in Frankfurt. The results also suggest a strong tendency toward direct exchange rate targeting before 1999, which coincides with a period of lower demand shock synchronization. This finding is supported by our analysis of the minutes of the Governing Board of the SNB for the period between 1982 and 1993. The discussions and decisions of the board show that Swiss monetary policy was largely guided by policy rate changes of the Bundesbank. The SNB routinely set the policy rate below the policy rate of the Bundesbank to enforce an implicit exchange rate target.
{"title":"Made in Frankfurt? The Monetary Policy of the Swiss National Bank Since 1973","authors":"Alexander Rathke, Tobias Straumann","doi":"10.1057/s41294-024-00242-0","DOIUrl":"https://doi.org/10.1057/s41294-024-00242-0","url":null,"abstract":"<p>The paper investigates the monetary policy of the Swiss National Bank (SNB) in the post-Bretton Woods era, shedding light on the dynamics between the SNB and the Bundesbank and its successor, the European Central Bank, respectively. Our econometric analysis shows a high degree of synchronisation between the SNB’s interest rate changes and the decisions made in Frankfurt. The results also suggest a strong tendency toward direct exchange rate targeting before 1999, which coincides with a period of lower demand shock synchronization. This finding is supported by our analysis of the minutes of the Governing Board of the SNB for the period between 1982 and 1993. The discussions and decisions of the board show that Swiss monetary policy was largely guided by policy rate changes of the Bundesbank. The SNB routinely set the policy rate below the policy rate of the Bundesbank to enforce an implicit exchange rate target.</p>","PeriodicalId":46161,"journal":{"name":"Comparative Economic Studies","volume":null,"pages":null},"PeriodicalIF":0.8,"publicationDate":"2024-08-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141882680","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 : 2024-07-19DOI: 10.1057/s41294-024-00241-1
Øyvind Eitrheim, Jan Fredrik Qvigstad
We review developments in monetary policy and exchange rate regimes in Norway since the Bretton Woods system collapsed. Norway has traditionally had a monetary policy regime geared towards exchange rate stability. The long history with fixed exchange rates as "normalcy" may be one factor which explains the rather late transition to inflation targeting in Norway. This "fear of floating" may seem hard to explain today. We look at five episodes, in 1992, 1998, 2008, 2014 and 2020, respectively, through the lens of the prevailing monetary regime in real-time. What if we had reacted "as if" under the opposite regime?
{"title":"Norway’s Road to Inflation Targeting: Overcoming the Fear of Floating","authors":"Øyvind Eitrheim, Jan Fredrik Qvigstad","doi":"10.1057/s41294-024-00241-1","DOIUrl":"https://doi.org/10.1057/s41294-024-00241-1","url":null,"abstract":"<p>We review developments in monetary policy and exchange rate regimes in Norway since the Bretton Woods system collapsed. Norway has traditionally had a monetary policy regime geared towards exchange rate stability. The long history with fixed exchange rates as \"normalcy\" may be one factor which explains the rather late transition to inflation targeting in Norway. This \"fear of floating\" may seem hard to explain today. We look at five episodes, in 1992, 1998, 2008, 2014 and 2020, respectively, through the lens of the prevailing monetary regime in real-time. What if we had reacted \"as if\" under the opposite regime?</p>","PeriodicalId":46161,"journal":{"name":"Comparative Economic Studies","volume":null,"pages":null},"PeriodicalIF":0.8,"publicationDate":"2024-07-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141741177","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 : 2024-07-13DOI: 10.1057/s41294-024-00239-9
Kadoukpè Gildas Magbondé, D. Thiam, M. Konté
{"title":"Foreign Direct Investment, Institutions, and Domestic Investment in Developing Countries: Is there a Crowding-Out Effect?","authors":"Kadoukpè Gildas Magbondé, D. Thiam, M. Konté","doi":"10.1057/s41294-024-00239-9","DOIUrl":"https://doi.org/10.1057/s41294-024-00239-9","url":null,"abstract":"","PeriodicalId":46161,"journal":{"name":"Comparative Economic Studies","volume":null,"pages":null},"PeriodicalIF":1.5,"publicationDate":"2024-07-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141651707","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 : 2024-07-01DOI: 10.1057/s41294-024-00240-2
Byambasuren Dorjnyambuu
This review offers a comprehensive perspective on income inequality literature in Central–Eastern European (CEE) nations, with a specific focus on six countries: Bulgaria, Romania, Poland, Hungary, Czechia, and Slovakia. By thoroughly examining existing research, this review uncovers the underlying factors and root causes contributing to varying income inequality levels and trends across CEE countries. The investigation is conducted through a systematic literature review and network analysis, focusing on the literature published since 1990, mainly on recent studies. The review is structured around three thematic frameworks (concept and measures, evidence, and causes). These three strands of the literature review not only offer a comprehensive picture of income inequality in CEE countries but also identify critical research gaps for further studies. The review underscores several critical areas for improvement within CEE studies. These include addressing gaps in geographical and temporal coverage, utilizing alternative measurements of income inequality, and investigating the causes of diverging trends in income inequality among CEE countries. Moreover, there is a pressing need to expand the understanding of the determinants influencing income inequality in these nations, which presents a significant opportunity for future research.
{"title":"A Systematic Literature Review of Income Inequality in Central–Eastern European Countries","authors":"Byambasuren Dorjnyambuu","doi":"10.1057/s41294-024-00240-2","DOIUrl":"https://doi.org/10.1057/s41294-024-00240-2","url":null,"abstract":"<p>This review offers a comprehensive perspective on income inequality literature in Central–Eastern European (CEE) nations, with a specific focus on six countries: Bulgaria, Romania, Poland, Hungary, Czechia, and Slovakia. By thoroughly examining existing research, this review uncovers the underlying factors and root causes contributing to varying income inequality levels and trends across CEE countries. The investigation is conducted through a systematic literature review and network analysis, focusing on the literature published since 1990, mainly on recent studies. The review is structured around three thematic frameworks (concept and measures, evidence, and causes). These three strands of the literature review not only offer a comprehensive picture of income inequality in CEE countries but also identify critical research gaps for further studies. The review underscores several critical areas for improvement within CEE studies. These include addressing gaps in geographical and temporal coverage, utilizing alternative measurements of income inequality, and investigating the causes of diverging trends in income inequality among CEE countries. Moreover, there is a pressing need to expand the understanding of the determinants influencing income inequality in these nations, which presents a significant opportunity for future research.</p>","PeriodicalId":46161,"journal":{"name":"Comparative Economic Studies","volume":null,"pages":null},"PeriodicalIF":0.8,"publicationDate":"2024-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141502515","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 : 2024-06-03DOI: 10.1057/s41294-024-00237-x
Nathan Sussman, Charles Wyplosz
After centuries of metallic monies, for a long time, our understanding of fiat money had remained rudimentary and often controversial. Successive regimes eventually failed. The end of the Bretton Woods system marked the moment when the link between fiat money and gold was severed and when the possibility of letting exchange rates float became possible. The small open economies adopted various arrangements. Informed by these experiments, the understanding of monetary policy substantially progressed, leading to the widespread adoption of the expected inflation-targeting strategy with similar inflation targets. As a result, exchange rate variability has declined. The US dollar dominance was maintained and even increased. Yet, new challenges have emerged. The long period of interest rates stuck at the effective bound effectively suspended the use of the strategy. Then, during the post-pandemic surge in inflation rates, inflation forecasts became highly imprecise.
{"title":"Exchange Rate Regime Choices in Small Open Economies from Bretton Woods to Inflation Targeting","authors":"Nathan Sussman, Charles Wyplosz","doi":"10.1057/s41294-024-00237-x","DOIUrl":"https://doi.org/10.1057/s41294-024-00237-x","url":null,"abstract":"<p>After centuries of metallic monies, for a long time, our understanding of fiat money had remained rudimentary and often controversial. Successive regimes eventually failed. The end of the Bretton Woods system marked the moment when the link between fiat money and gold was severed and when the possibility of letting exchange rates float became possible. The small open economies adopted various arrangements. Informed by these experiments, the understanding of monetary policy substantially progressed, leading to the widespread adoption of the expected inflation-targeting strategy with similar inflation targets. As a result, exchange rate variability has declined. The US dollar dominance was maintained and even increased. Yet, new challenges have emerged. The long period of interest rates stuck at the effective bound effectively suspended the use of the strategy. Then, during the post-pandemic surge in inflation rates, inflation forecasts became highly imprecise.</p>","PeriodicalId":46161,"journal":{"name":"Comparative Economic Studies","volume":null,"pages":null},"PeriodicalIF":0.8,"publicationDate":"2024-06-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141253196","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 : 2024-05-17DOI: 10.1057/s41294-023-00230-w
Edison Jakurti
{"title":"Business Equity and Wealth Inequality in Central and Eastern Europe","authors":"Edison Jakurti","doi":"10.1057/s41294-023-00230-w","DOIUrl":"https://doi.org/10.1057/s41294-023-00230-w","url":null,"abstract":"","PeriodicalId":46161,"journal":{"name":"Comparative Economic Studies","volume":null,"pages":null},"PeriodicalIF":0.8,"publicationDate":"2024-05-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140964690","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 : 2024-05-06DOI: 10.1057/s41294-024-00234-0
Essotanam Mamba
This study examines the effects of manufacturing trade and natural resource rents (NRRs) on manufacturing growth in the Economic Community of West African States (ECOWAS) from 1996 to 2020. While industrialization plays an important role in the process of economic growth and poverty reduction, descriptive evidence shows a very low level of manufacturing growth in ECOWAS. The instrumental variables approach with fixed effects is applied to address the endogeneity, autocorrelation, heteroscedasticity and heterogeneity issues. We find a positive (negative) effect of manufacturing trade, manufacturing exports and intra-ECOWAS trade (NRRs) on manufacturing growth while manufacturing imports and total trade are insignificant. However, additional findings show that their effects (manufacturing trade, NRRs) vary from one country to another. Furthermore, we reveal the presence of the Laffer natural resource Curve (inverted U). Finally, the effect of manufacturing trade on manufacturing growth is mediated via NRRs. ECOWAS policymakers must rely on both manufacturing trade and intra-trade in the ECOWAS region to boost manufacturing growth. Also, better management of natural resource rents associated with good trade policies is needed to stimulate manufacturing growth.
本研究探讨了 1996 年至 2020 年制造业贸易和自然资源租金对西非国家经济共同体(西非经共体)制造业增长的影响。虽然工业化在经济增长和减贫过程中发挥着重要作用,但描述性证据显示西非国家经济共同体的制造业增长水平非常低。为了解决内生性、自相关性、异方差性和异质性问题,我们采用了带有固定效应的工具变量方法。我们发现,制造业贸易、制造业出口和西非经共体内部贸易(NRRs)对制造业增长有正(负)影响,而制造业进口和贸易总额的影响并不显著。然而,其他研究结果表明,它们(制造业贸易、净减税率)的影响因国家而异。此外,我们还发现了拉弗自然资源曲线(倒 U 型)的存在。最后,制造业贸易对制造业增长的影响是通过净资源回报率介导的。西非经共体的决策者必须依靠西非经共体地区的制造业贸易和内部贸易来促进制造业增长。此外,还需要更好地管理与良好贸易政策相关的自然资源租金,以刺激制造业增长。
{"title":"Natural Resource Rents, Manufacturing Trade, and Manufacturing Growth: Evidence from Linear and Nonlinear Regressions for ECOWAS Countries","authors":"Essotanam Mamba","doi":"10.1057/s41294-024-00234-0","DOIUrl":"https://doi.org/10.1057/s41294-024-00234-0","url":null,"abstract":"<p>This study examines the effects of manufacturing trade and natural resource rents (NRRs) on manufacturing growth in the Economic Community of West African States (ECOWAS) from 1996 to 2020. While industrialization plays an important role in the process of economic growth and poverty reduction, descriptive evidence shows a very low level of manufacturing growth in ECOWAS. The instrumental variables approach with fixed effects is applied to address the endogeneity, autocorrelation, heteroscedasticity and heterogeneity issues. We find a positive (negative) effect of manufacturing trade, manufacturing exports and intra-ECOWAS trade (NRRs) on manufacturing growth while manufacturing imports and total trade are insignificant. However, additional findings show that their effects (manufacturing trade, NRRs) vary from one country to another. Furthermore, we reveal the presence of the Laffer natural resource Curve (inverted U). Finally, the effect of manufacturing trade on manufacturing growth is mediated via NRRs. ECOWAS policymakers must rely on both manufacturing trade and intra-trade in the ECOWAS region to boost manufacturing growth. Also, better management of natural resource rents associated with good trade policies is needed to stimulate manufacturing growth.</p>","PeriodicalId":46161,"journal":{"name":"Comparative Economic Studies","volume":null,"pages":null},"PeriodicalIF":0.8,"publicationDate":"2024-05-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140939907","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 : 2024-05-02DOI: 10.1057/s41294-024-00235-z
Idrissa Ouedraogo, Issa Dianda, Pegdwende Patrik Roland Ouedraogo, Tiraogo Rodrigue Ouedraogo, Bassirou Konfe
This paper investigates the effects of taxation on income inequality in an unbalanced panel of 45 countries in Sub-Saharan Africa over the period 1980–2018. We use two-stage least squares and the instrumental variables quantile regression estimates. We find that taxation widens income inequality and that the increasing effects of taxation on income inequality are higher in the most unequal countries than in the least unequal ones. The paper provides evidence that countries in Sub-Saharan Africa should improve the progressivity of their tax systems, so that taxation policy can be used to reduce income inequality.
{"title":"The Effects of Taxation on Income Inequality in Sub-Saharan Africa","authors":"Idrissa Ouedraogo, Issa Dianda, Pegdwende Patrik Roland Ouedraogo, Tiraogo Rodrigue Ouedraogo, Bassirou Konfe","doi":"10.1057/s41294-024-00235-z","DOIUrl":"https://doi.org/10.1057/s41294-024-00235-z","url":null,"abstract":"<p>This paper investigates the effects of taxation on income inequality in an unbalanced panel of 45 countries in Sub-Saharan Africa over the period 1980–2018. We use two-stage least squares and the instrumental variables quantile regression estimates. We find that taxation widens income inequality and that the increasing effects of taxation on income inequality are higher in the most unequal countries than in the least unequal ones. The paper provides evidence that countries in Sub-Saharan Africa should improve the progressivity of their tax systems, so that taxation policy can be used to reduce income inequality.</p>","PeriodicalId":46161,"journal":{"name":"Comparative Economic Studies","volume":null,"pages":null},"PeriodicalIF":0.8,"publicationDate":"2024-05-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140940022","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}