Front Matter

Front Matte

Front Matter

Front Matte

How successful are International Monetary Fund loan programs?

Abstract. This paper evaluates the effectiveness of International Monetary Fund (IMF) loan programs from 2000 to 2010 by looking at macroeconomic indicators such as the unemployment rate, inflation, real GDP, government debt as a percentage of GDP, and export value. Data is used from the year before the implementation of the IMF loan program to three years after the loan policy was implemented. We chose three years into the future because it gives time for the macroeconomic factors within a country to fully materialize while weeding out much “white noise” (shocks that have nothing to do with the program itself).  Our analysis shows that IMF loan programs between 2000 and 2010 were generally unsuccessful in improving macroeconomic growth and stability in countries that sought loans. An accompanying workbook contains the data.Keywords. IMF; Lending.JEL. F30; F33; F34

Why negative rates are not a solution for Japan or the Eurozone

Abstract. Since the Global Financial Crisis in 2008-09 four major central banks have implemented Quantitative Easing (QE) programs. However, the types of QE implemented by the Federal Reserve and the Bank of England on the one hand and the Bank of Japan (BoJ) and the European Central Bank on the other have been very different. In the case of the Fed and the Bank of England, the QE operations were consistent with an expansion of deposits in the banking system, a reduction of leverage in the non-bank private sector, and the gradual normalization of growth, interest rates and inflation. By contrast, the QE operations of the Bank of Japan and the ECB have not been consistent with an expansion of deposits in the banking system or a reduction of leverage in the non-bank private sector, and hence they have failed to promote the gradual normalization of growth, interest rates and inflation.Keywords. Central bank; Quantitative Easing; Monetary policy; Currency boards, Japan.JEL. E40; E42; E52

From Keynes’ Clearing Union to the Euro-zone and the Renminbi

Abstract. The 1944 Bretton Woods agreement provided an international imprimatur for the dollar standard. H. D. White, the lead US negotiator, saw to it that the ability of other countries to obtain commitments from the US (via the International Monetary Fund) for loans or approval for currency devaluations would be limited. J.M. Keynes, representing Britain, in contrast proposed an International Clearing Union that would issue its own currency (“bancor”), intended to reduce systemic dependence on the dollar or on gold. The ICU would be a bank for the world’s central banks, which would allow debtor nations to borrow freely.  In contrast to White’s plan, ICU creditors would be expected to reduce their balances by expanding domestic credit or other means. Insights from Keynes’ plan help to understand later developments. An ICU premise was that international reserves should be pooled, and centralized.  The Bretton Woods gold-dollar standard was jeopardized during the 1960s – the Triffin dilemma -- when European creditor countries demanded gold reserves from the US. A monetary truce, proposed by Mundell, would have included 1) agreement by Europe and the US on an inflation level, and for US monetary policy to target that level; and 2) Europeans adjust their gold-to-dollar ratios to maintain the US gold stock. Monetary cooperation could thereby have created de facto international reserves. Instead, the Bretton Woods exchange rate apparatus collapsed by 1973, leaving major currencies to float. Against expectation, international demand for reserves soared. Relentless demand for US securities has contributed to deindustrialization and financial fragility, ongoing consequences of the dollar standard.  And exchange rate depreciation has done little to correct account imbalances. Clearing Union concepts help to understand the euro experiment – when it nearly failed, and how it recovered. An international currency can succeed only if 1) surplus and creditor countries are both required to adjust; and 2) member countries agree on inflation objectives. Demands on China to revalue have been misguided.  From the perspective of 2022, correction of account imbalances will not happen without the approval of the world’s now largest creditor – China – which is likely to resist any constrain on its actions.  This is and will be a drag on the world economy.Keywords. Bretton Woods;  International Clearing Union;  Bancor;  John Maynard Keynes;  Harry Dexter White;  Robert Triffin;  Robert Mundell;  Triffin Dilemma;  Monetary truce; 1966; Euro-zone; Renminbi revaluation; Partial equilibrium models; Multi-lateral clearing;  Flexible exchange rates.JEL. F02; F31; F33; F36; F38; F41; F45

Competitiveness of agricultural farms of different juridical types, sizes, specialization, and locations in Bulgaria

Abstract. The competitiveness of farms is usually assessed through traditional indicators of technical and accountancy efficiency, the productivity of factors of production, the profitability of activity, farms’ market position and shares, etc. A systematic approach for defining competitiveness and formulating its pillars, principles, criteria, and indicators has been rarely implemented, end the critical governance aspects have been largely ignored. The article incorporates a holistic multipillars framework, and assesses the levels of and correlations between the competitiveness of Bulgarian farms of different juridical types, economic sizes, product specialization, and ecological and geographical locations. Farm competitiveness is defined as capability (governance and production potential) of an agricultural holding to maintain sustainable competitive positions on (certain) market(s), leading to high economic performance through continuous improvement and adaptation to changing market, natural and institutional environment. Accordingly, the main “pillars" of farm competitiveness are identified as Economic efficiency (Production Pillar), Financial endowment (Financial Pillar), Adaptability and Sustainability (Governance Pillar). For assessing the level of competitiveness of Bulgarian farms, a system of 4 criteria for each Pillar and 17 particular and 5 integral indicators are used. The study has found out that the level of competitiveness of agricultural holdings in the country is at a good level, but there is significant differentiation in the level and factors of competitiveness of holdings with different juridical types, sizes, product specialization, ecological and geographical location. The low adaptive potential and economic efficiency to the greatest extent contribute to lowering the competitiveness of Bulgarian agricultural producers. Especially critical for maintaining the competitive positions of farms are the low productivity, income, financial security and adaptability to changes in the natural environment, in which directions the public support of farms and their management strategies for development should be directed. A large share of farms of different types have a low level of competitiveness, and if measures are not taken in a due time to increase competitiveness by improving the management and restructuring of farms, adequate state support, etc., a large part of Bulgarian farms will cease to exist in the near future. The suggested approach for assessing the competitiveness of farms should be improved and applied more widely and periodically. The precision and representativeness of the information used should also be increased by increasing the number of farms surveyed, which requires close cooperation with other interested parties, and improving the system for collecting agro-statistical information in the country and the EU.Keywords. Competitiveness; Production; Financial, and governance pillars; Farms.JEL. Q10; O31; O33; Q01; Q16; Q18

Comparative analysis of the effects of COVID-19 in 2020 and 2021: Case study of Italy

Abstract. This study develops a comparative analysis of the effects of Coronavirus disease 2019 (COVID-19) between April-June 2020 (without vaccinations) and April-June 2021 (with vaccinations) in Italy. The findings reveal that the dynamics of COVID-19 is declining because of its seasonality that reduce the effects in summer season. Hence, this study provides critical lessons that could be of benefit to countries for crisis management of pandemic diseases, showing how seasonality can reduce the diffusion of airborne disease of novel viral agents in summer.Keywords. Pandemic diseases; Coronavirus, vaccines, Vaccination campaigns; Health systems; Climate; Seasonality.JEL. Q10; O31; O33; Q01; Q16; Q18

Inter-university competition in different competitive environments

Abstract. This study examines the policy effects adopted by the Ministry of Education, Culture, Sports, Science and Technology (MEXT), the regulatory authority, on Japanese higher education, the university. It analyze using data to analyse the effects of both regional development and the improvement of the quality of education. Three hypotheses were tested regarding the MEXT's policies on quality assurance, such as increasing the number of universities, diversification of education, regional development, accreditation systems and subsidies for private education, which the MEXT has been working on since the 2000s following the relaxation of the criteria for establishing universities. The results of analysis shows that the number of students choosing regional universities did not increase, only the number of regional universities increased. In addition, small regional universities have not been able to differentiate themselves. It was confirmed that small universities are fully competitive and that the improvement in the quality of education has not been a factor in increasing the number of students at regional universities.Keywords. Competition; University; Policy effect; Differentiation.JEL. M10; I21; I23; I26

The crrency board debate of the 1940s-1960s

Abstract. The late 1940s to the 1960s featured a sustained debate about currency boards in underdeveloped (or, in today’s parlance, developing) economies and their desirability compared to the alternative of central banking. Critics of currency boards found fault with them for the foregone cost of their “idle reserves,” their implied deflationary bias, their lack of discretionary monetary policy, and their lack of a lender of last resort, among other things. Defenders of the currency board system argued that the criticisms were either incorrect or irrelevant. After carefully reviewing the debate, I opine on it, coming down mainly on the side of the defenders of currency boards.Keywords. Currency board; Debate.JEL. B27, E59, F33, N10

Influencers on economic issues in Latin America, Spain and the United States II

Abstract. The technological progress in our modern societies has witnessed the emergence of persons who deploy different means of communication across social networks, seeking to generate an impact among their audiences. These efforts in social media communications attempt to alter consumption preferences and patterns, political choices, as well as reinforce or modify opinions of all sorts and stripes. Individuals who attain greater relevance due to effects they trigger on third parties are characterized as influencers, and one of their preferred means of communication are online platforms or social media. Among them, Twitter stands out as the most conducive space for debates on ideas, political parties, or public policies. This social media platform is a microblogging service that allows a person to send short messages (up to 280 characters) that are displayed on a user’s individual page, and that are replicated on their followers’ pages. In this paper, we aim to identify the most important influencers in Latin America, the United States and Spain, who use this social media network to debate issues primarily related to economics and economic policy. On this subject, there is a very strong discussion about the role that the government should play in economic life, the pros and cons of greater regulation, the problem of income distribution, the impact of inflation, and the nature of free markets and capitalism. We will first describe the methodology we employed, in order to then proceed to illustrate a ranking of the ten most relevant influencers, in terms of number of followers, from Argentina, Brazil, Colombia, Chile, Mexico, Spain, and the United States. We then explore their profiles and present an analysis of the economic issues debated on the relevant Twitter accounts on a per country basis. Based on this analysis, we present a hypothesis on the positioning of influencers in economic matters. Finally, the global reach of the universe of influencers that are considered in this essay is described and measured.Keywords. Technological progress; Social media communications; Influencers; Economists.JEL. A10