Targeting inflation and the fiscal balance : what is the optimal policy mix?

This paper identifies optimal policy rules in the presence of explicit targets for both the inflation rate and public debt. This issue is investigated in the context of a dynamic stochastic general equilibrium model that describes a small open economy with capital accumulation, distortionary taxation and nominal price rigidities. The model is solved using a second-order approximation to the equilibrium conditions. Optimal policy features a strong anti-inflation stance and strict fiscal discipline. Targeting a domestic inflation index - as opposed to CPI - improves welfare because it reduces the inefficiencies that stem from both price stickiness and income taxes.Inflation (Finance) ; Prices ; Fiscal policy

The performance of monetary and fiscal rules in an open economy with imperfect capital mobility

This paper studies monetary and fiscal policy rules, and investigates the characteristics of optimal policies. The central focus of the paper is on the comparison of two types of fiscal rules: a balanced budget and a target for the primary surplus. Balanced budget rules (or, more generally, numeric ceilings to the overall budget deficit) are criticized because they may dictate higher taxes in periods of weak economic activity. The primary surplus rule, in contrast, has a less pro-cyclical nature, given that it does not require higher fiscal austerity in periods when the cost of servicing public debt is higher. In a nutshell, it allows a higher degree of tax smoothing. It is not clear, however, if (inevitable) fiscal adjustments should be postponed. These issues are investigated in the context of a dynamic stochastic general equilibrium model that describes an open economy, with capital accumulation, and where nominal rigidities are present. The model shows that previous findings drawn from open economy models—in particular with respect to the characteristics of optimal monetary policy—do not hold once the implications of certain fiscal regimes are taken into account, and once different scenarios concerning the degree of capital mobility are considered. The model is calibrated and simulated for the case of Brazil, a country that since 1999 has targets for inflation and for the primary surplus. The main finding is that a fiscal regime characterized by a target for the primary surplus delivers superior economic performance, a property captured by the shape of the efficient policy frontier.Monetary policy ; Fiscal policy ; Inflation (Finance)

Case study: The development of the HDI Tree

This paper describes the process of developing graphical metaphors and diagrammatic representations for the Human Development Index – HDI– and its components: the HDI Tree (UNDP, 2011). In 1990, the United Nations Development Programme introduced the Human Development Index as a measure of development that combines indicators of life expectancy, educational attainment and income. The project was commissioned to César A. Hidalgo (2010) by the Human Development Report office and developed in collaboration with three senior students at Northeastern University. The objective was to explore ways to simplify and communicate the Human Development Index using visual rather than numerical representations. Here, we describe the design process, discuss the concepts behind the metaphor, and analyze two selected visualizations. We conclude by examining how the Development Tree can be used in visual narratives for educational and outreach purposes

DEBT, FINANCIAL FRAGILITY AND ECONOMIC GROWTH: A POST-KEYNESIAN MACROMODEL

It is developed a mathematical post-keynesian macromodel of capacity utilization and growth in which the supply of credit-money is endogenous and firms' debt position - and thus the financial fragility of the economy - is explicitly modeled. Both the influence of interest rate and indebtedness on capacity utilization and the rates of profit and growth, on the one hand, and the effect of the parameters of the saving and investment functions on financial fragility, on the other hand, are carefully analyzed.

Soberania alimentar, agroecologia e mercados locais.

A Rede Ecovida tem estimulado a construção de uma Rede Solidária de Produção e Circulação de Produtos Ecológicos nos estados do Paraná, de Santa Catarina e do Rio Grande do Sul, cujas células de comercialização são feiras livres, cooperativas de consumidores, mercados institucionais, pontos de abastecimento popular, pequenas lojas e comerciantes. Essa iniciativa é mais uma demonstração que práticas agroecológicas, associadas a mercados locais, trazem impactos positivos à Soberania Alimentar da população

Os primeiros tempos do Tempo nos Açores

A secção UAciência é coordenada pelo Professor Universitário Armindo Rodrigues.A história da meteorologia e um campo de estudos relativamente recente dentro da história das ciências, tanto nos vários países europeus como nos Estados Unidos. As leis fundamentais da Física são aplicáveis aos movimentos da atmosfera e dos oceanos, mas, principalmente após terem sido conhecidos os trabalhos de Wilhelm Bjerknes (1862-1921), os cientistas percebem que estão perante uma ciência fundamentada, a Meteorologia. Este campo de estudo pode contribuir para a compreensão dos processos sociais e económicos e, ainda, para o desenvolvimento das atividades cientificas nos diversos países. Através desta ciência são disponibilizados produtos de informação do tempo e do clima, permitindo o planeamento em diversos setores, nomeadamente na agricultura, gestão de recursos naturais, segurança alimentar, transporte, saúde, energia e redução do risco de desastres. Interessa-nos, em particular, o conhecimento sobre os processos pelos quais a Meteorologia nos Açores foi construindo os seus alicerces, porque, mais do que apenas um retorno ao passado, este conhecimento constitui um elo permanente que, de certa forma, explica e contextualiza os seus marcos históricos e o grau de avanço no presente. […].info:eu-repo/semantics/publishedVersio

Devolution and Accountability Effects in the Public Provision of Water Services in Indonesia

This paper separately evaluates how devolution and accountability, two distinct aspects of the decentralization reforms implemented in Indonesia in the year 2001, influenced the public provision of water services. Using household level data it is found that thedevolution of responsibility does not necessarily affect the provision of public services. Our findings show that the quality of publicly provided water decreased only in cities in which devolution was accompanied by a change in accountability. Robustness checks suggest that these results are driven by changes in the accountability framework rather than trends in the health services.Indonesia, decentralization, accountability, devolution, water

The challenge of high capital inflows to financial stability: an emerging market perspective.

High liquidity and continued economic weakness in advanced economies have led to a surge in capital flows to emerging markets with strong fundamentals and open financial accounts such as Brazil. While capital inflows have undeniable benefits to emerging economies, they are also potentially destabilising. Past experience has shown that high levels of capital inflows can lead to exchange rate volatility and credit or asset price bubbles. In the context of Brazil’s inflation-targeting regime for monetary policy, macroprudential measures have proved to be a useful complement to traditional macroeconomic policies. However, today’s imbalanced global economy presents an especially difficult challenge for policymakers. The international financial community needs to work together on two fronts: improving our macroprudential toolkit and building a stronger framework for multilateral macroeconomic cooperation.