Jocelyn Horne

Scope and Limits of International Economic Cooperation and Policy Coordination

Several important issues relating to international economic cooperation and policy coordination are considered for the scope and limits to both within the present international monetary system. Sources of the perceived need for cooperation and coordination are identified, and the experience of countries with policy coordination within the current international system are described. The benefits and costs to policy coordination are then discussed, followed by consideration of ways to increase the effectiveness of international cooperation.

Evolution of Exchange Rate Regimes

Issues relating to the evolution of exchange rate regimes are examined. Empirical regularities concerning the variation over time of real and monetary disturbances and cross-country inflation differentials are first discussed. The paper then develops a model that incorporates these regularities and thereby enables exchange rate regime changes to be viewed as optimal and predictable responses by policymakers to a changing economic environment.

The asset market model of the balance of payments and the exchange rate: A survey of empirical evidence

Abstract The purpose of this survey is to assemble and evaluate empirical evidence on the asset market model of the balance of payments and the exchange rate. In Section I the distinctive features of asset market models are compared with earlier Keynesian models. Particular attention is directed to the assumptions and predictions of the monetary model which is a special and well-known case of more general asset market models and thereby serves as a useful benchmark for discussion. In Sections II and III, the empirical evidence under fixed and flexible exchange rates is evaluated. The paper is concluded in Section IV with an assessment of our current state of knowledge.

Exchange Rate Indicators and Optimal Currency Baskets: A Macroeconomic Analysis with Application to Developing Countries

This paper presents a framework for deriving and estimating an optimally-weighted exchange rate index within a general equilibrium model. The weighting method is shown to be equivalent to the optimal control approach of Turnovsky (1982), suggesting that the optimally-weighted exchange rate index might also be useful for the purposes of stabilization policy. Optimally-weighted exchange rate indices are constructed for a group of Asian developing countries using a vector autoregression model. The properties of the weighted indices are examined and their usefulness for policy, both as economic indicators and as currency baskets is discussed.

The Diffusion of Bankcard in Australia: A Note

The purpose of this note is to quantify the degree of market penetration and diffusion by Bankcard in the Australian consumer credit sector. A modified demand-determined logistic model of diffusion is estimated for the sample period 1976(4)–1983(1) in which the saturation level is assumed to be driven by the weighted interest differential between Bankcard and competing credit instruments. The diffusion speed of Bankcard is shown to be more rapid than that of U.S. bank credit cards but somewhat slower than that of a new deposit instrument, saving-investment accounts analysed in Broadbent, Clements and Johnson (1981).