The aggregate effects of temporary government purchases

Consumption (Economics) ; Expenditures, Public

EMU at 1

Economic and monetary union (EMU) among eleven of the fifteen members of the European Union began on January 1, 1999. The national currencies of the eleven were abolished and replaced with a new single currency, the euro. Responsibility for monetary policy shifted from the national central banks to the European Central Bank. Many commentators in the United States thought EMU would never come about or, if it did, that it would not last long. In this article Mark Wynne reviews EMU's first year. He looks at how the economy of the euro area has fared under the single monetary policy, examines how successful the ECB has been in fulfilling its mandate for price stability, and considers the prospects for the future. Despite the dramatic decline in the euro against the dollar over the course of 1999, the first year of EMU must be judged a success. While it is still too early to say whether in the long run the euro will be a strong currency like the Deutsche mark, the institutional design of EMU and the performance of those institutitions over the first year are promising.

Core inflation: a review of some conceptual issues

This paper reviews various approaches to the measurement of core inflation that have been proposed over the years using the stochastic approach to index numbers as a unifying framework. It begins with a review of how the concept of core inflation is used by the world’s major central banks, including some of the inflation-targeting central banks. The author provides a comprehensive review of many of the measures of core inflation that have been developed over the years and highlights some of the conceptual and practical problems associated with them.Inflation (Finance)

The sluggish recovery from the Great Recession: why there is no ‘V’ rebound this time

The Great Recession of 2008–09 was by far the most severe United States economic downturn since the Great Depression of the 1930s. Real gross domestic product (GDP), the most comprehensive measure of U.S. economic activity, topped out in fourth quarter 2007 and has yet to approach that peak. Employment totaled just below 138 million jobs in January 2008 and, as of July 2011, was still nearly 5 percent below its precrisis level.Recessions ; Business cycles ; Gross national product

Taxation, growth, and welfare: a framework for analysis and some preliminary results

Reform of the U.S. tax system has become the focus of much political discourse in recent years. Proposals have called for many types of change-from the relatively modest, like more favorable treatment of capital gains or tax credits for college education, to more radical plans to introduce a flat tax and "end the IRS as we know it." The benefits of such proposals, advocates claim, range from a more efficient, less burdensome tax collection process to higher long-run growth. ; In this article, Mark Wynne provides a framework for analyzing the validity of some of these claims. He begins with a look at how U.S. tax rates on capital, labor, and consumption compare with similar tax rates of other major industrialized countries. Wynne then develops a framework for analyzing how some potential tax reforms might affect the economy's long-run growth rate. He uses a series of simple tax reform experiments to illustrate a basic principle of efficient taxation: that a shift toward heavier taxation of consumption would be beneficial.Taxation ; Welfare

The world's newest currency

Money ; Euro ; Euro-dollar market ; European Central Bank ; European currency unit ; European Monetary System (Organization) ; Monetary unions - European Union countries