N°
94
01 Feb 1991
Financial Liberalisation and International Trends in Stock, Corporate Bond and Foreign Exchange Market Volatilities Paul Kupiec
This paper is one of four in this Working Paper series, focusing on financial liberalisation, along with those by Miller and Weller, Driscoll, and Blundell-Wignall and Browne. It examines the historical volatilities of stock, bond and foreign currency markets over alternative periods differing...
N°
93
01 Feb 1991
A Macroeconomic Model for Debt Analysis of the Latin America Region and Debt Accounting Models for the Highly Indebted Countries Peter Dittus, Paul S. O'Brien
During the 1980s, following the Mexican payments crisis of August 1982, a number of debt "plans" and "strategies" have been introduced, but overall progress in resolving the situation has been slow. This paper results from a project to investigate the relationship between macroeconomic...
N°
92
01 Feb 1991
Unemployment Persistence and Insider-Outsider Forces in Wage Determination Bertil Holmlund
The rise in European unemployment has inspired much new research on the causes and mechanisms of unemployment, analogous to the interest devoted to unemployment in the 1930s. The new research has to a large extent focused on wage-setting behaviour, as is revealed by the rapid growth of...
N°
91
01 Jan 1991
Infrastructure and Private-Sector Productivity Robert Ford, Pierre Poret
A recent study by David Aschauer suggested a novel explanation for the slowdown of private-sector total factor productivity (TFP) in the United States in the early 1970s. He argues that it is due to the roughly contemporaneous slowdown in the rate of investment in public-sector infrastructure....
N°
90
01 Jan 1991
The Public Sector H. Oxley, M. Maher, John P. Martin, Giuseppe Nicoletti, P. Alonso-Gamo
Since the early 1980s, most OECD countries have embarked on medium-term strategies to restore greater balance to the public finances and to wind back government intervention in the economy. The attached paper examines the progress so far. It also reviews and evaluates some of the changes to...
N°
89
01 Dec 1990
A Survey of Studies of the Costs of Reducing Greenhouse Gas Emissions Peter Hoeller, Andrew Dean, Jon Nicolaisen
This paper surveys various estimates of the macroeconomic implications of reducing greenhouse gas emissions. Most available studies focus on policies to reduce CO2 emissions and are limited to the costs of such policies. The survey first examines the key factors shaping baseline emission...
N°
88
01 Nov 1990
Business Investment in the OECD Economies R. Ford, P. Poret
Investment growth in the OECD area has been higher in the second half of the 1980s than in the 1970s. However, the ratio of net investment to GDP has remained low by past cyclical standards. This paper first reviews the evolution of business-sector fixed investment and addresses measurement...
N°
87
01 Nov 1990
The "Puzzle" of Wage Moderation in the 1980s Pierre Poret
In the 1980s, real consumption wages fell relative to labour efficiency in OECD countries, although there has been some pressure on wages recently. The persistent moderation of wages was due to labour-market slack, as well as rising non-wage labour costs and slower increases in output prices...
N°
86
01 Oct 1990
Modelling Wages and Prices for the Smaller OECD Countries Kenichi Kawasaki, Peter Hoeller, Pierre Poret
This paper presents work on wage/price blocks for the smaller OECD countries which has been implemented in OECD's world econometric model, INTERLINK. The paper discusses theoretical, statistical and practical aspects of the estimation of business sector wage equations and five domestic demand...
N°
85
01 Oct 1990
Simulating the OECD INTERLINK Model under Alternative Monetary Policy Rules Pete Richardson
This paper reviews the influence of a variety of different monetary rules for the G3 economies on the comparative simulation properties of a recent version of the OECD INTERLINK model. The simulated shocks are typically of a "global" nature, with the main objective being to assess the relative...
N°
84
01 Aug 1990
Walras - A Multi-Sector, Multi-Country Applied General Equilibrium Model for Quantifying the Economy-Wide Effects of Agricultural Policies Jean-Marc Burniaux, François Delorme, Ian Lienert, John P. Martin
This paper presents a technical description of the OECD's multi-sector, multi-country applied general equilibrium model -- the WALRAS model. This model has been developed with the explicit objective of quantifying the economy-wide effects of agricultural policies in OECD countries. The common...
N°
83
01 July 1990
Exchange Rate Policy in Advanced Commodity-Exporting Countries Adrian Blundell-Wignall, Robert G. Gregory
The paper examines the desirability of exchange rate management in a commodity-exporting country, in which the terms of trade are driven by the world commodity price cycle. When the authorities are assumed to pursue an inflation objective, the usefulness of managing the rate depends on the...
N°
82
01 July 1990
Economics and the Environment Jon Nicolaisen, Peter Hoeller
Concerns over the pace, scope and causes of environmental degradation have led to a renewed interest in the way environmental and economic policies interact. This paper first reviews the main causes for excessive use of environmental resources in a market economy, and how governments may...
N°
81
01 Mar 1991
Financial Liberalisation and Consumption Behaviour Adrian Blundell-Wignall, Frank Browne, Stefano Cavaglia
The paper addresses the question of whether financial liberalisation and innovation has significantly altered consumption behaviour by reducing liquidity constraints as capital markets become more flexible. A consumption model in which the permanent income hypothesis and extreme Keynesian...
N°
80
01 Apr 1990
Fiscal Indicators Edward M. Gramlich
This paper is one of three in this Working Paper Series, along with those by Chouraqui et al. and Blanchard, in which the assessment of fiscal policy is reconsidered. It reviews the question of what type of budget indicators the OECD should compile. Instead of the cyclically-adjusted budget, it...
N°
79
01 Apr 1990
Suggestions for a New Set of Fiscal Indicators Olivier Jean Blanchard
There are four sets of questions that fiscal indicators can help answer: (1) Of the changes in the fiscal position, what part is due to changes in the economic environment and what part is due to policy? (2) Can the current course of fiscal policy be sustained, or will the government have to...
N°
78
01 Apr 1990
Indicators of Fiscal Policy Jean-Claude Chouraqui, Robert P. Hagemann, Nicola Sartor
During the past decade, the formulation of fiscal policy has been increasingly founded on medium-term considerations associated with public debt and economic efficiency. In this regard, this paper, and the ones by Olivier Blanchard and Edward Gramlich in the same Working Paper Series, considers...
N°
77
01 Apr 1990
Monetary Policy in the Wake of Financial Liberalisation Adrian Blundell-Wignall, Frank Browne, Paolo Manasse
The paper examines evidence concerning the impact of financial liberalisation and innovation on monetary policy. The indicator value of monetary aggregates and the role of liquidity constraints in the transmission mechanism affecting aggregate demand are examined. Countries where financial...
N°
76
01 Feb 1990
The Dollar Position of the Non-U.S. Private Sector, Portfolio Effects, and the Exchange Rate of the Dollar Bixio Barenco
This paper measures the net dollar position of the non-U.S. private sector and a few other international positions -- notably the net foreign-currency position of the U.S. private sector. These currency positions provide the basis for a discussion of portfolio effects which are especially...
N°
75
01 Feb 1990
Measuring Industrial Subsidies Neil Bruce
Industrial subsidies should ideally be measured in ways that permit comparisons across subsidy instruments and countries, and that facilitate subsequent economic analysis of the effects of subsidisation. This paper deals with a number of conceptual issues that arise from these requirements. It...
N°
74
01 Jan 1990
Industrial Subsidies in the OECD Economies Robert Ford, Wim Suyker
Subsidisation of industrial activities distorts the allocation of scarce resources, is a burden on government finances and generates friction in international trade. This paper draws on a wide range of data sources to examine industrial subsidisation in OECD countries. The sectoral distribution...
N°
73
01 Jan 1990
The Saving Behaviour of Japanese Households Kenichi Kawasaki
This paper surveys Japanese saving behaviour, whose rate is one of the highest among OECD countries. Macroeconomic factors such as rates of economic growth and inflation may have been important in explaining the high saving rate in the past and the more recent downward trend. Even though growth...
N°
72
01 Jan 1990
The Role of Indicators in Structural Surveillance OECD
This paper examines the role of structural indicators in the process of multilateral surveillance of structural policies. An analytical framework is suggested that is based on welfare economics and which focuses on efficiency considerations. Potential indicators are examined for six areas --...
N°
71
01 Oct 1989
Modelling Business Sector Supply for the Smaller OECD Countries Raymond Torres, Peter Jarrett, Wim Suyker
This paper presents business sector supply blocks for thirteen smaller OECD economies. The starting point is the approach adopted by the Economics and Statistics Department for the major economies. The structure of the supply blocks is explained and estimation results are presented. Results...
N°
70
01 Sep 1989
On the Sequencing of Structural Reforms Sebastian Edwards
Both OECD and developing economies have embarked on structural reforms aimed at dismantling regulations and reducing the extent of distortions affecting different sectors of their economies. Regardless of the marked differences, both groups have to deal with the problems of the appropriate...
N°
69
01 Sep 1989
The Information Content of the Term Structure of Interest Rates Frank Browne, Paolo Manasse
The paper is devoted to an empirical examination of the information content in the term structure of nominal interest rates for future inflation. Tests of the ability of the term structure to forecast future changes in the inflation rate are carried out for six major OECD countries using...
N°
68
01 June 1989
The Impact of Increased Government Saving on the Economy R. Herd
An increase in long-term economic growth requires higher investment in the OECD economies if it is to be achieved, otherwise faster growth will generate unsustainable pressure on resources. Higher investment can only occur if there is higher saving which could perhaps be generated by an...
N°
67
01 June 1989
Saving Trends and Behaviour in OECD Countries Andrew Dean, Martine Durand, John Fallon, Peter Hoeller
National saving ratios are generally lower now than in the 1960s or 1970s. This paper first reviews developments in national and international saving and investment trends in OECD countries since the 1960s. It then examines sectoral saving trends and considers the links between them. There are...
N°
66
01 May 1989
Potential Output in the Seven Major OECD Countries Raymond Torres, John P. Martin
This paper outlines the concepts and methods used by the OECD Secretariat to derive estimates of potential output and capacity utilisation for the major seven countries. While there are many alternative definitions of potential output, the one which is currently being used by the OECD...
N°
65
01 Feb 1989
A Post Mortem on OECD Short-term Projections from 1982 to 1987 B. Ballis
This paper reviews the accuracy of OECD projections over the 1982-1987 period. It is shown that, although the evolution of the economic climate was correctly projected, projection errors for economic activity and inflation varied significantly both through the period under consideration and...
N°
64
01 Jan 1989
Revised Groupings for Non-OECD Countries in OECD's Macroeconomic Model INTERLINK Paul O'Brien, Laure Meuro, Arthur Camilleri
This paper provides details of the regrouping of non-OECD countries which has been carried out for the purposes of the forecasting and modelling work in the Department of Economics and Statistics. The new groups were used for the first time in OECD Economic Outlook no. 44 ...
N°
63
01 Dec 1988
Modelling Housing Investment for Seven Major OECD Countries Thomas Egebo, Ian Lienert
This paper presents new housing equation estimates for the major seven countries in INTERLINK, the OECD world econometric model. Theoretical and empirical aspects of housing investment behaviour are discussed in a model context. Estimation results using an adjustment model for the stock of...
N°
62
01 Jan 1989
The Economic Dynamics of an Ageing Population Alan J. Auerbach, Laurence J. Kotlikoff, Robert P. Hagemann, Giuseppe Nicoletti
Demographic changes, such as those anticipated in most OECD countries, have many economic effects that impinge on a country's fiscal viability. Evaluation of the effects of associated changes in capital-labour ratios and the welfare and behaviour of different generations requires the use of a...
N°
61
01 Jan 1989
Ageing Populations Robert P. Hagemann, Giuseppe Nicoletti
Recent swings in fertility rates, combined with anticipated increases in life expectancy, are expected to result in a significant increase in the number and proportion of elderly persons in the first half of the next century. This "ageing" of OECD populations is expected to have widespread...
N°
60
01 Nov 1988
The OECD Compatible Trade and Production Data Base 1970-1985 Claude Berthet-Bondet, Derek Blades, Annie Pin
The Compatible Trade and Production data base (COMTAP) consists of annual statistics on production, imports and exports of manufactured goods. The key feature of this data base is that both the production and trade statistics are classified according to the same nomenclature, namely, the...
N°
59
01 Dec 1988
Eliminating the U.S. Federal Budget Deficit by 1993 R. Herd, B. Ballis
This paper uses the OECD's economic model, INTERLINK, to examine the consequences of eliminating the U.S. federal government deficit. Such action could lead to either lower real interest rates, lower inflation rates or a smaller current account deficit, depending on the stance of monetary...
N°
58
01 Nov 1988
Empirical Research on Trade Liberalisation with Imperfect Competition J. David Richardson
Orthodox trade theory rests on a number of unrealistic assumptions which include, among others, constant returns to scale in production and perfect competition in product and factor markets. This has led many commentators to express strong skepticism about the policy conclusions flowing from...
N°
57
01 Nov 1988
An International Sectoral Data Base for Thirteen OECD Countries F. J.M. Meyer-zu-Schlochtern
This paper describes an international sectoral data base, the ISDB, which has been created at the OECD as part of the continuing study of industrial structure and economic performance in OECD Member countries. This data base is one which relates primarily to sectoral output and factor resource...
N°
56
01 Nov 1988
On Aggregation Methods of Purchasing Power Parities J. R. Cuthbert, M. Cuthbert
The development of purchasing power parities as converters of national accounts aggregates to comparable volume figures is important for international economic comparisons. This study is primarily concerned with the aggregation of price relativities to basic heading level: that is, the level...
N°
55
01 July 1988
Quantifying the Economy-Wide Effects of Agricultural Policies Jean-Marc Burniaux, François Delorme, Ian Lienert, John P. Martin, Peter Hoeller
This paper presents a progress report on the Economics and Statistics Department's applied general equilibrium model -- the WALRAS model. This model has been developed with the explicit objective of quantifying the economy-wide effects of agricultural policies in OECD countries. The common...
N°
54
01 May 1988
Tests of Total Factor Productivity Measurement A. Steven Englander
Although considerable effort has been expended on constructing measures of total factor productivity, there has been little subsequent effort at verifying that the constructed data have the expected properties. This paper proposes a number of tests to determine whether total factor productivity...
N°
53
01 Apr 1988
Alternative Solution Methods in Applied General Equilibrium Analysis Richard G. Harris
This paper discusses the relative strengths and weaknesses of alternative solution methods in applied general equilibrium (AGE) analysis. The particular focus is not on the technical properties of solution algorithms, but instead deals with the general issue of using linearised approximation...
N°
52
01 Apr 1988
The So-Called "Non-Economic" Objectives of Agricultural Policy L. Alan Winters
Agricultural support costs OECD countries billions of dollars per year in lost income. It is frequently argued, however, that this is not waste, but is rather a fair price to pay for a number of "non-economic" objectives such as thriving rural communities and increased national security. This...
N°
51
01 Apr 1988
The Effects of Monetary Policy on the Real Sector Jean-Claude Chouraqui, Michael Driscoll, Marc-Olivier Strauss-Kahn
The purpose of this study is to assess the current state of understanding about the effects of monetary policy, both at the conceptual level and in the light of the experience of the seven major OECD countries (the United States, Japan, Germany, France, the United Kingdom, Italy and Canada) and...
N°
50
01 Jan 1988
Private Consumption, Inflation and the "Debt Neutrality Hypothesis" Giuseppe Nicoletti
This paper examines the empirical basis for the debt-neutrality hypothesis in an international cross-section of eight major OECD countries over the period 1961-85. The analysis uses a dynamic demand system for durable and non-durable goods derived from individual optimizing behaviour. The model...
N°
49
01 Feb 1988
Are Commodity Prices Leading Indicators of OECD Prices? Martine Durand, Sveinbjörn Blöndal
This paper examines the hypothesis that commodity price trends are useful indicators of OECD price developments. After a discussion of statistical techniques to assess the time series properties of individual price indices, integration and cointegration tests are conducted on a wide set of...
N°
48
01 Dec 1987
The Medium-Term Macroeconomic Strategy Revisited Jean-Claude Chouraqui, Kevin Clinton, Robert Bruce Montador
This paper discusses several aspects of the medium-term orientation of OECD countries' economic policies in the 1980s, concentrating on monetary and fiscal instruments. The developments that led to the adoption of such a "medium-term strategy", and the apparent analytical rationale for it, are...
N°
47
01 July 1987
A Review of the Simulation Properties of OECD's INTERLINK Model Pete Richardson
This paper reviews the simulation properties of a recent version of the OECD Secretariat's international macroeconomic model, INTERLINK, a version which embodies much of the empirical work reported in recent Working Papers and summarised in a separate companion paper ESD Working Paper No. 46....
N°
46
01 June 1987
Recent Developments in OECD's International Macroeconomic Model Pete Richardson
This paper summarizes recent empirical studies contributing towards the OECD Secretariat INTERLINK world macroeconomic model. For a number of topics, it reviews work which is described in more detail in recent Economics and Statistics Department Working Papers. It also covers a number of areas...
N°
45
01 June 1987
International Investment-Income Determination in INTERLINK David T. Coe, Richard Herd, Marie-Christine Bonnefous
This paper presents the specification of an investment-income model for 23 OECD countries and six non-OECD regions. The basic structure of the model -- an effective rate of return applied to the stock of foreign assets and liabilities -- is relatively simple and straightforward. A central...
