15 research outputs found
Transparency and Pre-meetings
Some committees are made up of experts, persons interested in both the (subject) matter at hand and in coming across as able decision-makers. Such committees would like to concea
How committees of experts interact with the outside world: some theory, and evidence from the FOMC
Some committees are made up of experts, persons who care both
about the matter at hand and about coming across as able decision-
makers. We derive two propositions about the way members of such
committees interact with the outside world. First, they would like
to conceal disagreement from the public. That is, once the decision
has been reached, they show a united front to the outside world.
Second, if such committees are required to become transparent, e.g.,
by publishing verbatim transcripts of their meetings, members will
organize pre-meetings away from the public eye. Large part of the
paper is dedicated to a case study of the U.S. Federal Open Market
Committee in the United States. It provides suggestive evidence
supporting the two propositions
The housing ladder, taxation, and borrowing constraints
Using a multi-tier model of the housing market, we show that both starters and movers benefit from mortgage interest deduction for higher income groups. However, such tax favouring also tends to facilitate house price explosions, especially when interest rates and downpayment ratios are low. More in general, the efficiency of implicit tax subsidies to homeowners depends critically on the price responsiveness of new construction, which is found to differ strongly from country to country. Irrespective of supply conditions, running down mortgage interest deduction is likely to detract from the profits of lending institutions
Regional Price Adjustment in a Monetary Union: the case of EMU
Using a New-Keynesian framework, we investigate how far the inflationary processes in member states of EMU cause regional price levels to converge. We fail to produce hard evidence of the present existence of such an adjustment mechanism, notwithstanding that inflation in some countries tends to converge towards the euro area level. Overa11, inflation persistence has declined significantly over the years, but there are still marked differences between countries on this score. We conclude that the euro area is not an optimal currency area yet, lending support to the quest for further structura1 reforms in European labour and product markets
In Search of the Motives behind US Fiscal Macroeconomic Policy
In this paper optimal control techniques are applied to estimate the motives behind US fiscal macroeconomic policy. Starting from a range of possible objectives and given the perception of policy makers about the environment in which they operate, the priorities of policy makers are estimated on the basis of their past actions. Our statistical approach allows for testing the empirical relevance of alternative hypotheses with respect to the objectives of governments. Democratic and Republican administrations are found to aim at different targets. Some support is also found to political business cycle theories