Alvaro Angeriz

NEW ESTIMATES OF RETURNS TO SCALE AND SPATIAL SPILLOVERS FOR EU REGIONAL MANUFACTURING, 1986-2002

Esta investigacion aborda el fenomeno de la desindustrializacion de la economia colombiana en el periodo 2005-2017 desde un marco de analisis kaldoriano; se centra en indagar el papel de la industria manufacturera como motor de crecimiento. El modelamiento parte de las Leyes de Kaldor usando dos paneles: uno de tipo balanceado con datos agregados para 23 areas metropolitanas y el otro desbalanceado agregando datos desde el nivel de firma con la muestra obtenida de la Encuesta Anual Manufacturera para el periodo. El analisis demuestra que el debilitamiento del sector manufacturero se expresa en el declive sostenido de su participacion en el empleo total y el PIB, y en el vinculo nocivo entre la dinamica del empleo manufacturero y el crecimiento del producto. Las evidencias de la desindustrializacion identificadas admiten concluir que el aporte de la manufactura al crecimiento economico se sustenta en rendimientos crecientes a escala estaticos.

PRODUCTIVITY, EFFICIENCY AND TECHNOLOGICAL CHANGE IN EUROPEAN UNION REGIONAL MANUFACTURING: A DATA ENVELOPMENT ANALYSIS APPROACH*

Using data envelopment analysis, we calculate indices of total factor productivity (TFP), efficiency and technological change for the manufacturing sectors of 68 European NUTS1 regions over the period 1986-2002. We subsequently examine these indices using exploratory spatial data analysis (ESDA) techniques, before considering tendencies towards convergence in both TFP and technical efficiency levels. While the ESDA reveals significant spatial autocorrelation, the convergence analysis uncovers no tendency for regions with initially lower TFP to catch up with regions with initially higher TFP. However, convergence is found in levels of technical efficiency, although towards a relatively lower average level. Copyright Blackwell Publishing Ltd and The University of Manchester 2006.

The consensus view on interest rates and fiscal policy: reality or innocent fraud?

Current economic policy upgrades monetary policy and downgrades fiscal policy. Monetary policy involves the manipulation of the central bank interest rate, with the specific objective of achieving the main goal of monetary policy, which is, in most cases, the inflation rate. Fiscal policy should not be used as an instrument of stabilization policy. This raises two issues. The first is the theoretical underpinnings of this mode of economic policy. The second is the extent the quantitative impact of monetary and fiscal policy in the real world adhere to the principles set out by theory. Both aspects are investigated in this paper. We summarize results drawn from the euro area, the United States, and the United Kingdom. Two important conclusions emerge: the empirical results point to a relatively weak effect of interest rate changes on inflation. Also, monetary policy can have long-run effects on real magnitudes. Fiscal policy does have strong effects after all.

Inflation Targeting: Assessing the Evidence

Inflation targeting (IT) as a policy framework, designed to tame inflation, has been with us since the early 1990s. Recent work makes the point that a significant number of countries adopted this strategy, and the number is growing. For example, Sterne (2002) suggests that 54 countries pursued one form or another of IT by 1998, compared with only six in 1990. A more recent study (IMF, 2005) suggests that 21 countries (8 developed and 13 emerging) are now clear inflation targeters, pursuing a fully-fledged IT strategy (FFIT). Indeed, a number of other countries are seriously considering the adoption of this strategy. Many studies have attempted to examine empirically the degree and extent of the impact of IT on inflation in various countries. We review this literature in what follows and conclude that the available empirical evidence produces mixed results.

Assessing the Empirical Evidence on Inflation Targeting and Possible Lessons for Brazil

The purpose of this chapter is to prepare the ground for the chapter that follows immediately. We assess the empirical evidence on Inflation Targeting (IT), a new policy framework designed to tame inflation, and consider whether the assessment can be helpful in studying the experience in Brazil with such strategy. This policy framework has been with us since the early 1990s and given that IT was introduced in Brazil in 1999, lessons for the latter can be ascertained. Recent work makes the point that a significant number of countries adopted this strategy, and the number is growing. For example, Sterne (2002) suggests that 54 countries pursued one form of IT or another by 1998, compared with only 6 in 1990. A more recent study (IMF, 2005) suggests that 21 countries (8 developed and 13 emerging) are now clear inflation targeters, pursuing a full-fledged IT strategy (FFIT in short). IMF (2006) has recently reported that there are 17 countries that have sought technical assistance to be able to introduce it. A number of studies have attempted to examine empirically the degree and extent of the impact of IT on inflation. We review this literature in what follows and conclude that the available empirical evidence produces mixed results. In pursuing an IT strategy, countries commit themselves to price stability as the main objective of monetary policy, along with stipulating that medium-to-long-term inflation is the nominal anchor where an inflation target is set.

The Interest Rate Channel in the New Monetary Policy Framework

Is the current consensus about monetary policy valid? As the authors see it, current monetary policy is designed to use interest rates as a control on longterm inflation. The authors assess the concept, summarize the empirical data, and find that the theory may not work. Supply shocks may cause most inflation, not demand.