Montserrat Ferré

Explaining aggregate private saving behaviour: new evidence from a panel of OECD countries

This study analyses some of the empirical determinants of aggregate private saving rates for a panel of 21 OECD countries over the period 1964 to 2001. Among the fiscal determinants considered, there is evidence of an important trade-off between public and private saving and a negative effect of higher current public expenditure on private saving. Among the macroeconomic and financial variables introduced, the income growth rate is the most significant and has a positive effect on private saving. Finally, only a demographic variable, the urbanization rate, has a positive effect on private saving. Interestingly, the sub-sample formed by the G-7 countries shows substantial qualitative and quantitative differences in the determinants of aggregate private saving, particularly a reduction of the effects of the fiscal policy variables.

Purchasing power parity revisited: evidence from old and new tests for an organisation for economic co-operation and development panel

The objective of this article is to study long-run Purchasing Power Parity (PPP) for a panel of 21 Organisation for Economic Co-operation and Development (OECD) countries from the end of the Bretton Woods era by applying a wide range of the econometric techniques available. This will allow us to present a comprehensive up to date examination of the empirical validity of PPP, covering the weak and strong versions of the hypothesis with individual and panel analysis, including the absence or presence of cross-dependency, the linear or nonlinear behaviour of the real exchange rates and the degree of persistence. Overall, the results provide evidence in favour of PPP.

Central bank coordinated intervention: a microstructure approach

In this article, we develop a theoretical microstructure model of coordinated central bank intervention based on asymmetric information. We also set up a game where central banks will choose whether to intervene unilaterally or in a coordinated manner, and we study the conditions under which they prefer to coordinate. Finally, we study the economic implications of coordination on some measures of market quality and show that the model predicts higher volatility and more significant exchange rate changes when central banks coordinate compared to the case when they intervene unilaterally. These predictions are in line with empirical evidence. Further, the effects of coordinated intervention are, from a social point of view, more desirable than those of unilateral intervention.

The Effects of Public Expenditure on Private Consumption: A Disaggregated Analysis for Spain (1970-1997)

Abstract The main purpose of this article is to provide empirical evidence for Spain on the dependency relationship between government spending and private consumption at the disaggregated level. To this end, we will use two approaches that extend traditional consumption models, allowing for non-separability of consumers’ preferences between public and private goods and services. The results obtained show significant links between public and private consumption and, in particular, they point towards the importance of carrying out the analysis at the disaggregated level: there is evidence that some components of public and private consumption act as substitutes, whereas others act as complements.