Martin Mühleisen

Sub-Saharan Africa; Growth, Savings, and Investment, 1986-93

This paper assesses the economic performance during 1986-93 of sub-Saharan African countries as a group and of selected analytical subgroups of countries.

Population aging in Japan: demographic shock and fiscal sustainability

The paper develops a general equilibrium framework to examine the economic implications of population aging in Japan. Particular attention is paid to aggregate saving behavior which is modeled on the basis of empirical age-earnings profiles using a life-cycle approach. The papers objectives are to (i) estimate the output loss caused by demographic changes and assess the impact of aging on Japans government finances; and (ii) compare fiscal policy options with respect to their effects on output growth and economic welfare.

How Do Canadian Budget Forecasts Compare With Those of Other Industrial Countries

This paper compares Canadian central government budget forecasting with forecasting by other industrial countries. While fiscal forecasting in Canada is governed by one of the strongest institutional frameworks, quantitative analysis suggests that budget projections of macroeconomic and fiscal aggregates have been more cautious than in other countries since the mid-1990s. The relatively volatile macroeconomic environment as well as institutional factors, such as Canada&aposs asymmetric deficit target, have likely contributed to this outcome.

Energy, the Exchange Rate, and the Economy; Macroeconomic Benefits of Canada’s Oil Sands Production

This paper describes potential benefits from Canadas expanding oil sands production, higher energy exports, and further improvements in the terms of trade. Contrary to the previous Canadian exchange rate literature, this paper finds that both energy and nonenergy commodity prices have an influence on the Canadian dollar, and some upward pressure on the exchange rate would therefore be expected. Model results suggest, however, that the impact on other tradable goods exports is limited.

Improving India`s Saving Performance

This paper discusses recent trends in Indian saving behavior and reviews policy options to increase domestic saving. In the absence of forceful policy measures, private saving would continue to rise gradually, but probably not by enough to finance the government`s growth target of 7 percent over the next decade. The most promising way to boost domestic saving would be through increased public saving and a strong structural reform program, including financial liberalization, which would initiate a virtuous growth-saving circle. To increase the efficiency of the savings allocation, particular attention should be paid to long-term saving instruments.

U.S. Revenue Surprises: Are Happy Days Here to Stay?

A key question for U.S. policymakers is whether the recent strength in federal revenue is likely to continue. This question is addressed through an econometric analysis of the determinants of tax revenue, using time series that are adjusted for tax policy changes. The results suggest that growth in corporate profits and capital gains each contributed forty percent of the increase in the revenue-to-GDP ratio from 2004-2006, and rising income inequality explains much of the rest. While part of the revenue rise is the result of structural changes taking place in the U.S. economy, some of the recent buoyancy is likely to prove temporary, reflecting the highly cyclical nature of these variables.

Effects of Macroeconomic Stabilityon Growth, Savings, and Investment in Sub-Saharan Africa; An Empirical Investigation

The analysis of this paper indicates that the unsatisfactory overall economic performance of sub-Saharan African countries during 1986-93 was due to inappropriate policies pursued by a number of countries. The countries that have pursued broadly appropriate adjustment policies have performed much better, achieving positive per capita GDP growth. The analysis is supported with an econometric investigation of the effects of macroeconomic policies, structural reforms, and exogenous factors on economic performance. The results indicate that progress in achieving macroeconomic stability and implementing structural reforms have been conducive to better growth, savings, and private investment.

Northern Star : Canada's Path to Economic Prosperity

Robust GDP growth, declining unemployment, low and stable inflation, and a string of fiscal and current account surpluses -- its a record to be envied. These outcomes in Canada owe much to sound macroeconomic policies, as well as to a favorable external environment. This book focuses on these policies and the economys salient features, including its close trade integration with the United States, large commodity sector, and substantial decentralization and regional diversity. It outlines what is unique about the Canadian experience and sheds light on policies and philosophies that can be fruitfully applied in other economies.

Monetary Policy and Inflation Indicators for Finland

This paper is assessing various leading indicators of inflation in Finland and their practical role in a framework for Finnish monetary policy under a floating exchange rate. Following Friedman (1990) who argued for the explicit inclusion of a broad set of economic indicators in the monetary decision process, absent a practical intermediate target, this paper tests a large number of indicators for their relevance in determining future inflationary pressure and guiding monetary policy. The robustness of the indicators is examined under different models, guided by alternative views of the monetary transmission process. The results indicate that a monetary conditions index, stumpage prices, and real and nominal effective exchange rates are among the strongest indicators, affecting inflation with a lag of between 4 and 11 quarters.