Currency substitution and currency controls: The Polish experience of 1990

Monetary Policy;Social Welfare;431;024;311;Currency Substitution;432;134;monetary economics

Social welfare effects of a common currency

Monetary Policy;Ecu;EMS;Social Welfare;431;024;311;432;134;monetary economics

Currency substitution in Eastern Europe

Monetary instability during the transition process from a command economy to a market economy has induced a considerable increase in currency substitution in Eastern Europe. Currency substitution itself affects monetary stability since it reduces the stability of velocity. This paper investigates currency substitution in Eastern Europe. The consequences for the conduct of monetary policies are stressed as currency substitution of a significant degree has a large impact on monetary equilibrium and public finance. Currency substitution affects the shape of the seignorage Laffer-curve, since it makes its tax base, real money demand, sensitive to exchange rate expectations. With the use of the available data the sensitivity of money demand to currency substitution in the Eastern European countries is assessed.Currency Substitution;monetary economics

Russia from Bust to Boom: Oil, Politics or the Ruble?

This paper develops and estimates a small macroeconomic model of the Russian economy. The model is tailored to analyze the impact of the oil price, the exchange rate, and political stability on economic performance. The model does very well in explaining Russia’s economic history in the period 1995-2002. We then use the model to simulate two sets of scenarios, one with various oil price scenarios and one with various adverse shocks. The simulations suggest that the Russian economy is still very vulnerable to oil price swings, and that these swings have asymmetric effects. Indeed the cost of a downward swing of oil prices seems to be larger than the benefit of an upward swing. We also find that the aggregate effects of an oil price collapse are comparable to these of renewed political instability. Although their propagation mechanism is quite different, both adverse shocks do have a similar effect on real GDP. A real exchange rate appreciation on the other hand has relatively mild effects on real GDP. All in all, it is suggested that Russia should reduce its vulnerability to adverse oil price shocks and maintain political stability.http://deepblue.lib.umich.edu/bitstream/2027.42/40108/3/wp722.pd

Direct diameter measurement of a star filling its Roche Lobe: The semi-detached binary SS Leporis spatially resolved with VINCI/VLTI

Stellar evolution in close binary systems is strongly influenced by mass transfer from one star to the other when one component fills its zero-velocity surface or Roche Lobe. SS Lep is a fairly nearby close binary showing the Algol paradox and a shell spectrum, both indicative of (past) mass transfer. To study the process of mass transfer and its evolutionary consequences, we aim at a direct characterisation of the spatial dimensions of the different components of SS Lep with IR interferometry. We use VINCI/VLTI interferometric observations in the K band and photometric observations from the UV to the far-IR. The visibilities are interpreted with simple geometrical models and the Spectral Energy Distribution (SED) is decomposed into the three main components: A star, M star and dust shell/disk. From the SED, we find that the main emitters in the K band are the M star and the circumstellar environment. Both are spatially resolved with the VINCI observations, showing the excess to be circumbinary and showing the M star to have a size equal to its Roche Lobe. We conclude that we have, for the first time, directly resolved a star filling its Roche Lobe. The resulting mass transfer is probably the cause of (1) the circumbinary dust disk of which we see the hot inner region spatially resolved in our observations, (2) the unusually high luminosity of the A star and (3) the shell spectrum seen in the UV and optical spectra.Comment: 4 pages, 2 figures, accepted for publication in A&A Letters on 26/05/200

Output Stabilization in EMU: IS there a Case for EFTS?

Macroeconomic performance in the Economic and Monetary Union (EMU) will be impaired if macroeconomic shocks are largely asymmetric, fiscal policy flexibility is limited, goods markets adjust sluggishly, labour mobility is low and automatic stabilization from federal taxes and government spending is low like in the EU currently.This paper addresses the question whether a system of fiscal transfers to stabilize differences in national business cycles can improve the overall macroeconomic performance in the monetary union.business cycles;output;EMS;monetary policy;fiscal policy

Essays on monetary and fiscal policy interaction:Applications to EMU and Eastern Europe

Abstract: The interaction of monetary and fiscal policies encompasses much research material and covers a respectable area in theoretical macroeconomics. In this broad research field, three different focuses are discernible. A first line of research studies the dynamic interdependence of monetary and fiscal policy due to the dynamic government budget constraint. The second approach concentrates on the interaction of fiscal and monetary policy regarding the stabilisation of output fluctuations. Finally, a large amount of literature exists on the "public finance view of inflation" which treats monetary policy as part of the tax system which the authorities operate. This Ph.D. thesis develops a number of applications of the theory of monetary and fiscal policy interaction in the context of EMU and transition in Eastern Europe. The first three chapters model the problem of government debt stabilisation in EMU as a dynamic conflict between the fiscal and monetary authorities. A fourth chapter studies output stabilisation in EMU and develops a transfer system to stabilise the effects of asymmetric shocks. The remaining chapters study the "public finance view of inflation" and develop applications with respect to the design of monetary policy in the economies in transition and developing countries.