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№ 1/2007
1West Ukrainian National University
The policies of federal reserve system and european central bank: comparison in the context of modern monetary theory and globalization problems
Ekon. teor. 2007; 1:65-75 |
ABSTRACT ▼
On the basis of the analysis of the average and dispersion values of inflation, unemployment and GDP growth during 1971–2006, the author reveals the main features of Fed and ECB monetary policy and compares them in the light of modern monetary theory and globalizations problems. The article argues that both central banks are pursuing a policy of price stability, being ECB more conservative, and, as compared to Fed, there exists a genetic connection between the policies of ECB and Bundesbank
Keywords:
JEL:
Article in Russian (pp. 65 - 75) | Download | Downloads :230 |
Article in Ukrainian (pp. 65 - 75) | Download | Downloads :328 |
REFERENCES ▼
№ 4/2007
1West Ukrainian National University
Coordination of fiscal and monetary policies under the conditions of globalization: integration of old and new ideas
Ekon. teor. 2007; 4:0-0 |
ABSTRACT ▼
The article analyzes various theoretical approaches to the problem of coordination between fiscal and monetary policies. On the basis of empirical analysis, the author establishes this character of the mixpolicy: fiscal policy functions as an automatic stabilizer, while monetary policy ensures price stability, hence the former is flexible and the latter is conservative. That phenomenon may be determined by the globalization, which is, however, not powerful enough to exert a unifying influence on mixpolicy variants in individual developed countries.
Keywords:
Article in Russian (pp. 59 - 71) | Download | Downloads :234 |
Article in Ukrainian (pp. 59 - 70) | Download | Downloads :216 |
REFERENCES ▼
№ 1/2010
1West Ukrainian National University
The theory of optimal currency areas in the context of global macro-financial change
Ekon. teor. 2010; 1:0-0 |
ABSTRACT ▼
The author proposes a method to adapt the theory of optimal currency areas to the modern tendencies of the fluctuations of global liquidity. He proves that symmetry of financial systems and common approaches to the provision of macroeconomic stability and macroeconomic reactions to financial cycle is an important criterion of optimality of a modern currency area. The article argues for the revaluation of the stabilizing role of exchange rate under the shocks of global demand
Keywords:
JEL:
Article in Russian (pp. 49 - 64) | Download | Downloads :218 |
Article in Ukrainian (pp. 49 - 64) | Download | Downloads :443 |
REFERENCES ▼
№ 3/2011
1West Ukrainian National University
Theoretical Dimension of Macrofinancial Risks of Eurozone’s Divergence
Ekon. teor. 2011; 3:0-0 |
ABSTRACT ▼
The necessity to return into the scholarly use of the institutional theory of the term "institution" is advocated in this essay. The economic nature of the institutions and the logic of their relations with organizations and other bodies is revealed. The arguments are produced which prove that the institutions are an essential foundation of the arrangements. More accurate definitions of these notions are offered.
Keywords:
Article in Russian (pp. 59 - 72) | Download | Downloads :227 |
Article in Ukrainian (pp. 59 - 72) | Download | Downloads :240 |
REFERENCES ▼
№ 4/2012
1West Ukrainian National University
The theory of optimal currency areas in the light of the global financial crisis and risks of the ECU divergence
Ekon. teor. 2012; 4:0-0 |
ABSTRACT ▼
The article deals with the impact of the global financial instability on the institutional environment of Ukraine’s monetary policy. The author proves that the need to perform their constitutional functions makes the central banks extent their activities on the adjacent areas of financial market, which creates additional risks and costs for the government’s monetary policy
Keywords:
Article in Russian (pp. 56 - 71) | Download | Downloads :252 |
Article in Ukrainian (pp. 56 - 71) | Download | Downloads :211 |
REFERENCES ▼
№ 3/2014
1West Ukrainian National University
Fiscal measurement of the theory of optimal currency areas in the light of the diver-gence of the EMU
Ekon. teor. 2014; 3:82-98 |
ABSTRACT ▼
Revealed the controversial role of fiscal policy in ensuring an optimum currency area. It is shown that bridging the differences between the fiscal convergence and stabilization opportunity to respond to asymmetrical shocks in the theory comes down to creating a fiscal union. It is proved that the specif-ics of the crisis in the EMU is a combination of the loss of fiscal discipline, financial imbalances and asymmetric loss of competitiveness under the conditions of low real interest rates. Confirmed the assumption that the capacity of the stabilizing reaction to asymmetrical shocks is rooted in the policy of reducing public debt. Theoretical behavior of the indicator of "Maastricht primary budget balance" demonstrates that the decline in real interest rates has created a favorite environment for the em-powerment of fiscal policy to respond to shocks, but this opportunity was lost due to the loss of fiscal discipline. It is proved that the system of centralized transfers is the politically and institutionally vul-nerable, as different countries are at different stages of real convergence. Centralization should be implemented in the direction of strengthening the rules that aims at reducing the debt load, after it had risen as a result of previous stabilization needs. Insurance system of sovereign risk must exist as a last resort and based on the principle of due credit.
Keywords:fiscal policy, the theory of optimum currency areas, fiscal convergence, fiscal union, EMU convergence
JEL: Е440, F370, H870
Article in Russian (pp. 82 - 98) | Download | Downloads :225 |
Article in Ukrainian (pp. 82 - 98) | Download | Downloads :260 |
REFERENCES ▼
Mongelli F. (2002) “New” Views on the Optimum Currency Area Theoty: What Is EMU Telling Us! // ECB Working Paper. № 138. Р. 5–51.
Brussels (1977а) Report of the Study Group on the Role of Public Finance in European Integration. Volume I: General Report. Commission of the European Communities. 68 p.
Brussels (1977б) Report of the Study Group on the Role of Public Finance in European Integration. Volume II: Individual Contributions and Working Papers. Commission of the European Communities. 61 p.
Begg I. (2009) Fiscal Federalism, Subsidiarity and the EU Budget: Review // Swedish Institute for European Policy Studies. 2009: 1. P. 1–68.
Majocchi A. (2011) Towards a European Federal Fiscal Union // Perspectives on Federalism. 2011. Vol. 3., Issue 1. P. 78–98.
Sachs J., Sala-i-Martin X. (1992) Fiscal Federalism and Optimum Currency Areas: Evidence for Europe from the United States // Establishing a Central Bank: Issues in Europe and Lessons from the US. Cambridge: Cambridge University Press.
Person T., Tabellini G. (1996) Federal Fiscal Constitutions: Risk Sharing and Moral Hazard // Econometrica. № 64 (3). Р. 623–646.
Person T., Tabellini G. (1996) Federal Fiscal Constitutions: Risk Sharing and Redistribution // Journal of Political Economy. № 104 (5). Р. 979–1009.
Obstfeld M., Peri G. (1998) Regional Non-Adjustment and Fiscal Policy // Economic Policy. № 26. Р. 205–259.
Pacheco L.-M. (2000) Fiscal Federalism, EMU and Shock Absorption Mechanisms: A Guide to the Literature // European Integration online Papers (EIoP). Vol. 4. №4. Р. 1–20.
Mundell R. (1973) The Economics of Common Currencies // Uncommon Arguments for Common Currencies / Ed. by H. Johnson and A. Swoboda. New York: Allen and Unwin. P. 114–132.
Dmitriev M., Hoddenbagh J. (2012) The Optimal Design of a Fiscal Union // Munich Personal PePEc Archive Paper. № 46166. Р. 1–45.
Werning I., Farhi E. (2012) Fiscal Unions // NBER Working Paper. № 18280. Р. 1–50.
Fidrmac J. (2013) Political Economy of Fiscal Unions // Center for Economic Studies and Ifo Institute Working Paper. № 4344. Р. 1–25.
Bandt O. de, Mongelli F. (2000) Convergence of Fiscal Policies in the Euro Area // ECB Working Paper. № 20. Р. 5–28.; Tujula M., Wolswijk G. (2004) What Determines Fiscal Balances? An Empirical Investigation in Determinants of Changes in OECD Budjet Balances // ECB Working Paper. № 424. P. 3–40.
Strauch R., Hallerbrg M., von Hagen J. (2004) Budgetary Forecasts in Europe – the Track Record of Stability and Convergence Programmes // ECB Working Paper. № 307. P. 3–45.
Hogeveg G. (2002) Regional Monetary Arrangements – Lessons from the Euro Area / Challenges to Central Banking from Globalized Financial Systems. Conference at the IMF in Washington, D.C., September 16–17, 2002 // IMF Seminars and Conferences Paper. P. 1–13.
Completing the Euro (2013) A Road Map Towards Fiscal Union in Europe. Report of the “Tommaso Padoa-Schioppa Group”. Notre Europe Studies and Reports. № 92. 68 р.
Furceri D., Zdzienicka A. (2013) The Euro Area Crisis: Need for a Supranational Fiscal Risk Sharing Mechanism? // IMF Working Paper. WP/13/198. P. 1–34.
IMF (2013а) Toward a Fiscal Union for the Euro Area // IMF Staff Discussion Note. P. 1–29.
Vetter S. (2013) Do All Roads Lead to Fiscal Union? Options for Deeper Fiscal Integration in the Eurozone // Deutsche Bank Research. EU Monitor. April. P. 1–16.
IMF (2013б) Reassessing the Role and Modalities of Fiscal Policy in Advanced Econo-mies // IMF Policy Paper. Sept. P. 1–63.
Laeven L., Valencia F. (2008) Systemic Banking Crises: a New Database // IMF Working Paper. WP/08/224. P. 1–46.
Rogoff K., Reinhart C. (2009) The Aftermath of Financial Crisis // NBER Working Paper. № 14587. Р. 1–38.
Baldacci E., Gupta R., Mulas-Granados C. (2009) How Effective is Fiscal Policy Response in Systematic Banking Crisis // IMF Working Paper. WP/09/160. P. 1–39.
Krugman P. (2013) Currency Regimes, Capital Flows, and Crises // Paper (Mundell-Fleming Lecture) Presented at the 14th Jacques Polak Annual Research Conference Hosted by the IMF, Wash. (D.C.), Nov. 7–8. P. 1–35.
IMF (2013в) Reassessing the Role and Modalities of Fiscal Policy in Advanced Economies // IMF Policy Paper. Sept. P. 1–63.
Christiansen L., Perez Ruiz E. (2013) What Role for Discretionary Fiscal Policy? A Discussion Anchored in the Stylized Facts of Past Consolidations // IMF Mimeo // www.imf.org
Koziuk V.V. (2012) Optymalnyi riven borhovoho navantazhennia: hlobalni makrofinansovi zrushennia ta shvydkoplynni ochikuvannia // Finansy Ukrainy. №1. S. 78–92.
Crespo-Cuaresma J., Pfaffermayr M., Amador O. F., Keppel C. (2011) Macroeconomic Aspects of European Integration: Fiscal Policy, Trade Integration and the European Business Cycle // FIW-Research Reports 2010/11. №4. Р. 1–33.
№ 3/2016
1West Ukrainian National University
Financial development, forex reserves and political regimes in resource rich economies
Ekon. teor. 2016; 3:82-102 | https://doi.org/10.15407/etet2016.03.082 |
ABSTRACT ▼
Macroeconomic and institutional distortions in the resource rich countries potentially should restrain the financial development, which is argued in a series of empirical findings. However, the present paper shows that, by index of financial development, such countries are at the average world level as world mean. This paradox may be explained by the heterogeneity of commodity countries. It is as-sumed that the nature of such heterogeneity is based on a mix of political regime and ability to accu-mulate exchange reserves as an institutional manifestation of the characteristic features of the distri-bution of resource rent. Typologically the commodity countries should reflect some mix of the level of democracy, reserves accumulation and level of financial development. Basing on the empirical analy-sis, 52 resource-rich countries are grouped in eight groups that represent theoretically meaningful relations between political regime, level of reserves accumulations and level of financial development. An undeniable inverse relationship between the richness of resources and level of democracy is found. At the same time, level of democracy is positively related with financial development when country is advanced in reforming and less dependent on forex reserves. Autocracies may support financial development only in the case of an implicit consensus about the increase in social welfare, which, in turn, requires large reserves. With reserve accumulation and financial development, weak democracies perform better than expropriative autocracies. It is proved that ability to accumulate reserves is a sign of how institutions avoid to waste the rent when resource richness is abnormal. In the case of low and moderate resource richness, the policy to increase the quality of institutions should be on frontier to facilitate financial development that, together with a more flexible exchange rate, will allow maintaining macrostability at a lower level of forex reserves.
Keywords:resource richness, commodity export, political regime, exchange reserves, financial de-velopment, quality of institutions, monetary regime, intertemporal savings
JEL: E58, E59, O23, Q33
Article in Russian (pp. 82 - 102) | Download | Downloads :608 |
Article in Ukrainian (pp. 82 - 102) | Download | Downloads :248 |
REFERENCES ▼
2. Aghion, Ph., Bacchetta, Ph. et al. (2006). Exchange Rate Volatility and Productivity Growth: The Role of Financial Development. NBER Working Paper, 12117. doi: https://doi.org/10.3386/w12117">doi.org/10.3386/w12117">https://doi.org/10.3386/w12117
3. Aizenman, J., Jinjarak, Y., Park, D. (2015). Financial Development and Output Growth in Developing Asia and Latin America: A Comparative Sectoral Analysis. NBER Working Paper, 20917, 1-37. doi: https://doi.org/10.3386/w20917">doi.org/10.3386/w20917">https://doi.org/10.3386/w20917
4. Aizenman, J., Lee, J. (2006). Financial Versus Monetary Mercantilism: Long-Run View of Large International Reserves Hoarding. IMF Working Paper, WP/06/280, 1-22. doi: https://doi.org/10.3386/w12718">doi.org/10.3386/w12718">https://doi.org/10.3386/w12718
5. Aizenman, J., Marion, N. (2004). International Reserve Holding with Sovereign Risk and Costly Tax Collection. Economic Journal, 17, 370-400.
6. Aizenman, J., Riera-Crichton, D. (2006). Real Exchange Rate and International Reserves in the Era of Growing Financial and Trade Integration. NBER Working Paper, 12363. doi: https://doi.org/10.3386/w12363">doi.org/10.3386/w12363">https://doi.org/10.3386/w12363
7. Aliyev, R. (2014). Determinants of the Choice of Exchange Rate Regime in Resource-Rich Countries. CERGE-EI Working Papers, 527, 1-36.
8. Arezki, R., Bruckner, M. (2010). Commodity Windfalls, Polarization, and Net Foreign Assets: Panel Data Evidence on the Voracity Effect. IMF Working Pape, WP/10/209, 1-25.
9. Auty, R. (2001). The Political Economy of Resource-driven Growth. European Economic Review, 45, 839-46. doi: https://doi.org/10.1016/S0014-2921(01)00126-X">doi.org/10.1016/S0014-2921(01)00126-X">https://doi.org/10.1016/S0014-2921(01)00126-X
10. Auty, R. (2001). Resource Abundance and Economic Development. Oxford: Oxford University Press.
11. Boyd, J., Levine, R., Smith, B. (2001). The Impact of Inflation on Financial Sector Performance. Journal of Monetary Economics, 47, 221-248. doi: https://doi.org/10.1016/S0304-3932(01)00049-6">doi.org/10.1016/S0304-3932(01)00049-6">https://doi.org/10.1016/S0304-3932(01)00049-6
12. Cihak, M., Demirguc-Kunt, A., Feyen, E., Levine, R. (2012). Benchmarking Financial Development Around the World. World Bank Policy Research Working Paper, 6175, 1-32.
13. Claessens, S., Laeven, L. (2003). Financial Development, Property Rights, and Growth. Journal of Finance, 58, 2401–2436. doi: https://doi.org/10.1046/j.1540-6261.2003.00610.x">doi.org/10.1046/j.1540-6261.2003.00610.x">https://doi.org/10.1046/j.1540-6261.2003.00610.x
14. Demirguc-Kunt, A., Feyen, E., Levine, R. (2011). The Evolving Importance of Banks and Securities Markets. World Bank Policy Research Working Paper, 5805, 1-42. doi: https://doi.org/10.1596/1813-9450-5805">doi.org/10.1596/1813-9450-5805">https://doi.org/10.1596/1813-9450-5805
15. Demirguc-Kunt, A., Levine, R. (1999). Bank-Based and Market-Based Financial Systems: CrossCountry Comparisons. World Bank Policy Research Working Paper, 2143, 1-34.
16. Dincer, N., Eichengreen, B. (March, 2014). Central Bank Transparency and Independence: Updates and New Measures. International Journal of Central Banking, 10, 1: 189-253.
17. Eichengreen, B., Hausmann, R. (1999). Exchange Rate and Financial Fragility. NBER Working Paper, 7418, 1-54. doi: https://doi.org/10.3386/w7418">doi.org/10.3386/w7418">https://doi.org/10.3386/w7418
18. IMF (October, 2015). Where Are Commodity Exporters Headed? Output Growth in the Aftermath of the Commodity Boom. World Economic Outlook, 2.
19. Kurronen, S. (2012). Financial Sector in Resource-Dependent Economies. BOFIT Discussion Papers, 6: 1-35. doi: https://doi.org/10.2139/ssrn.2027444">doi.org/10.2139/ssrn.2027444">https://doi.org/10.2139/ssrn.2027444
20. La Porta, R., Lopez-De-Silanes, F. et al. (1998). Law and Finance. Journal of Political Economy, 106:6, 1113-1155. doi: https://doi.org/10.1086/250042">doi.org/10.1086/250042">https://doi.org/10.1086/250042
21. Lin, J., Sun, X., Jiang, Y. (2009). Toward a Theory of Optimal Financial Structure. World Bank Policy Research Working Paper, 5038, 1-32. doi: https://doi.org/10.1596/1813-9450-5038">doi.org/10.1596/1813-9450-5038">https://doi.org/10.1596/1813-9450-5038
22. Mody, A., Rogoff, K. (2004). Exchange Rate Regime Durability and Performance in Developing Countries Versus Advanced Economies. NBER Working Paper, 10673.
23. Nili, M., Rastad, M. (2007). Addressing the Growth Failure of the Oil Economies: The Role of Financial Development. The Quarterly Review of Economics and Finance, 46:5, 726-740. doi: https://doi.org/10.1016/j.qref.2006.08.007">doi.org/10.1016/j.qref.2006.08.007">https://doi.org/10.1016/j.qref.2006.08.007
24. Prasad, E., Rogoff, K., et al. (2004). Financial Globalization, Growth and Volatility in Developing Counties. NBER Working Paper, 10942.
25. Rajan, R., Zingales, L. (1998). Financial Dependence and Growth. American Economic Review, 88, 559-586.
26. Roe, M., Siegel, J. (2011). Political Instability: Effects on Financial Development, Roots in the Severity of Economic Inequality. Journal of Comparative Economics, 39:3, 279-309. doi: https://doi.org/10.1016/j.jce.2011.02.001">doi.org/10.1016/j.jce.2011.02.001">https://doi.org/10.1016/j.jce.2011.02.001
27. Saborowski, Ch. (2009). Capital Inflows and the Real Exchange Rate: Can Financial Development Cure the Dutch Disease? IMF Working Paper, WP/09/20, 1-42.
28. Satyanath, Sh., Subramanian, A. (2004). What Determines Long-Run Macroeconomic Stability? Democratic Institutions. IMF Working Pape, WP/04/215, 1-51.
29. Svirydzenka, K. (2016). Introducing a New Broad-Based Index of Financial Development. IMF Working Paper, WP/16/5, 1-42. doi: https://doi.org/10.5089/9781513583709.001">doi.org/10.5089/9781513583709.001">https://doi.org/10.5089/9781513583709.001
30. Wills, S., van der Ploeg, R. (Jan. 30–31, 2014). Why Do So Many Oil Exporters Peg Their Currency? Foreign Reserves As A De-facto Sovereign Wealth Fund. Paper Presented at the joint RES-SPR Conference on «Macroeconomic Challenges Facing Low-Income Countries». IMF. Wash. DC.
№ 2/2017
1West Ukrainian National University
The factor of resource richness in the implementation of macro-prudential policies
Ekon. teor. 2017; 2:50-68 | https://doi.org/10.15407/etet2017.02.050 |
ABSTRACT ▼
The vulnerability of resource rich countries to trade shocks is further complicated due to capital flow reverses as drivers of macrofinancial instability. That opens the space for expanding the policy-mix tool-kit of macroprudential regulation that makes it possible to mitigate the conflict between price stability, exchange rates stability and financial stability, which is a challenge to efficient monetary policy. Hypothetically, the factor of resource richness could be a quite important motivator for intensifying the use of macroprudential regulation. This hypothesis is tested on a sample of 117 resource common countries and 38 resource rich countries. In first approximation this hypothesis looks valid taking into account the results of regression analysis. In the same time it looks paradoxical that transition to macroprudential regulation is corresponded with exchange rate flexibility and the mean macroprudential policy index in the group of inflation targeting countries is somewhat higher than in the resourcerich countries. It is possible to explain such a paradox by the heterogeneity of commodity exporting countries as to the combination of policy regime and the nature of macroeconomic adjustment that together reflect the institutional format of rent distribution. Grouping resourcerich countries by “policy regime – exchange rate regime” allows to identify the following three modalities of macroprudential policy: The first one reflects the development of countercyclical instruments outside the commodity factor of the procyclicality of financial system; the second one represents a continuation of the policy of capital flow regulation; and the third one is a way to maintain stability and control over the financial system. The first modality is used in mature democracies with flexible ex-change rate. The second one is characteristic for – in the nonmature democracies with rigid exchange rate regimes. And the third one – in the autocracies with a strong role of sovereign wealth funds as a counter-cyclical tool. It is concluded that commodity factor of financial instability in Ukraine should be in the focus of further development of the macroprudential toolkit.
Keywords: macro-prudential policy, commodity economy, financial stability, capital flows, external shocks.
JEL: E58, E59, O23, Q33
Article in Russian (pp. 50 - 68) | Download | Downloads :516 |
Article in Ukrainian (pp. 50 - 68) | Download | Downloads :380 |
REFERENCES ▼
2. Alberola, E., Benigno, G. (2017). Revisiting the Commodity Curse: A Financial Perspective. BIS Working Papers, 609, 1-55. doi: https://doi.org/10.3386/w23169">doi.org/10.3386/w23169">https://doi.org/10.3386/w23169
3. Bayoumi, T., Dell’Ariccia, G. et al. (2014). Monetary Policy in the New Normal. IMF Staff Discussion Note, SDN/14/3, 1-48. doi: https://doi.org/10.5089/9781475561784.006">doi.org/10.5089/9781475561784.006">https://doi.org/10.5089/9781475561784.006
4. Bernanke, B., Gertler, M. (1999). Monetary Policy and Asset Prices Volatility. Federal Reserve Bank of Kansas City Economic Review, is. QIV, 17-51.
5. Borio, C. (2006). Monetary and Prudential Policies at a Crossroads? New Challenges in the New Century. BIS Working Paper, 193, 2-28. doi: https://doi.org/10.2139/ssrn.948135">doi.org/10.2139/ssrn.948135">https://doi.org/10.2139/ssrn.948135
6. Borio, C. (2014). Monetary Policy and Financial Stability: What Role in Prevention and Recovery? BIS Working Paper, 440, 1-23.
7. Borio, C., White, W. (2004). Whither Monetary and Financial Stability? The Implications of Evolving Policy Regimes. BIS Working Paper, 147, 1-51. doi: https://doi.org/10.2139/ssrn.901387">doi.org/10.2139/ssrn.901387">https://doi.org/10.2139/ssrn.901387
8. Bruno, V., Shim, I. and Shin, H.S. (2014). Comparative Assessment of Macroprudential Policies. BIS Working Paper, 502, 1-56.
9. Carreras, O., Davis, Ph. et al. (2016). Macroprudential Tools, Transmission and Modelling. Firstrun Deliverable, 4.7, 1-57. doi: https://doi.org/10.2139/ssrn.2967270">doi.org/10.2139/ssrn.2967270">https://doi.org/10.2139/ssrn.2967270
10. Cerutti, E., Claessens, S. et al. (2015). The Use and Effectiveness of Macroprudential Policies: New Evidence. IMF Working Paper, WP/15/61, 1-36. doi: https://doi.org/10.5089/9781498321051.001">doi.org/10.5089/9781498321051.001">https://doi.org/10.5089/9781498321051.001
11. Cerutti, E., Correa, R. et al. (2016). Changes in Prudential Policy Instruments – A New Cross-Country Database. IMF Working Paper, WP/16/110, 1-23.
12. CGFS (2010). Macroprudential Instruments and Frameworks: A Stocktaking of Issues and Experience. CGFS Paper, 38 (Basel: BIS), 1-46.
13. Cizel, J., Frost, J. et al. (2016). Effective Macroprudential Policy: Cross-Sectors Substitution from Price and Quantity Measures. IMF Working Paper, WP/16/94, 1-47.
14. Claessens, S. (2014). An Overview of Macroprudential Policy Tools. IMF Working Paper, WP/14/214, 37. doi: https://doi.org/10.5089/9781484358115.001">doi.org/10.5089/9781484358115.001">https://doi.org/10.5089/9781484358115.001
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16. Ozkan F.G., Unsal, D.F. (2014). On the Use of Monetary and Macroprudential Policies for Small Open Economies. IMF Working Paper, WP/14/112, 1-26. doi: https://doi.org/10.5089/9781498375429.001">doi.org/10.5089/9781498375429.001">https://doi.org/10.5089/9781498375429.001
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24. Koziuk, V. (2016, March). Independence of Central Banks in Commodity Economies. Gerald of National Bank of Ukraine, 6-25.
25. Kurronen, S. (2012). Financial Sector in Resource-Dependent Economies. BOFIT Discussion Papers, 6, 1-35. doi: https://doi.org/10.2139/ssrn.2027444">doi.org/10.2139/ssrn.2027444">https://doi.org/10.2139/ssrn.2027444
26. Masson, P. (2014). Macroprudential Policies, Commodity Prices and Capital Inflows. BIS Papers, 76, 59-75.
27. Svensson, L. (2016). Cost-Benefits Analysis of Leaning Against the Wind: Are Costs Larger Also with Less Effective Macroprudential Policy? IMF Working Paper, WP/16/3, 1-76.
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№ 4/2019
KOZIUK Viktor 1, IVASHUK Yurii 2
1West Ukrainian National University
2Ternopil National Economic University
Behavioral basis for building self-stimulating environmental regimes
Ekon. teor. 2019; 4:29-41 | https://doi.org/10.15407/etet2019.04.029 |
ABSTRACT ▼
The effectiveness of self-stimulating environmental regimes in unsteady economic systems is considered in the article on the basis of the conducted behavioral experiment. It is shown that rational choice, as a methodological basis is not always a sufficient prerequisite for the development of effective environmental regimes. It is substantiated that the initial level of well-being may determine the preferences of economic entities regarding environmental benefits. It is noted that in conditions of low priority of social welfare and ecology, at the individual level there is no reason to believe that collective actions to increase the supply of environmental goods will be successful. It is revealed that the potential for replication of altruistic strategies is rather weak, and they are almost entirely offset by rent-invading behavior, while collective actions do not generate a proper emergent order in which opportunistic behavior would be subject to more stringent restrictions. In general, the results of the experiment indicate an increase in the effect of the gap between the individual rational rent-invading choices and the collective result, which leads to the degradation of the environment, which accordingly calls into question the expediency of creating a decentralized mechanism for financing the benefit of «clean ecology» in Ukraine. It is substantiated that in the short term, the very tools of environmental policy that will be based on the use of individuals to benefit from the implementation of such a policy and pushing them out will be potentially successful. However, in the long run, the improvement of the situation in the field of environmental goods may be based on changes in preferences that are not always strictly determined by the level of income, in particular, environmental policy should be associated with those changes in institutional quality and education that would be relevant to changes in preferences.
Keywords: behavioral experiment, public goods, ecological regime, rational choice, economic operators' preferences
JEL: Q58, E70
Article in Russian (pp. 29 - 41) | Download | Downloads :335 |
Article in Ukrainian (pp. 29 - 41) | Download | Downloads :277 |
REFERENCES ▼
2. Arrow K. (1987). Rationality of self and others in an economic system / in Hogarth, Robin M.; Reder, Melvin W. (eds.), Rational choice: the contrast between economics and psychology, Chicago: The University of Chicago Press.
3. Barrett S. (1994). Self-enforcing International Environmental Agreements. Oxford Economic Papers, 46, 878-894. doi: https://doi.org/10.1093/oep/46.supplement_1.878">doi.org/10.1093/oep/46.supplement_1.878">https://doi.org/10.1093/oep/46.supplement_1.878
4. Barrett S. (2006). Climate Treaties and "Breakthrough" Technologies. American Economic Review, 96 (2), 22-25.
5. Barrett S., Dannenberg A. (2012). Climate negotiations under scientific uncertainty. Proceedings of the National Academy of Sciences of the United States of America, 109, 17372-17376. doi: https://doi.org/10.1073/pnas.1208417109">doi.org/10.1073/pnas.1208417109">https://doi.org/10.1073/pnas.1208417109
6. Baumol W., Oates W. (1988). The Theory of Environmental Policy, 2nd Edition. Cambridge University Press. Cambridge.
7. Becker G. (1976). The Economic Approach to Human Behavior / The University of Chicago Press.
8. Bénabou R., Tirole J. (2006a). Incentives and Prosocial Behavior. American Economic Review, 96 (5), 1652-1678. doi: https://doi.org/10.1257/aer.96.5.1652">doi.org/10.1257/aer.96.5.1652">https://doi.org/10.1257/aer.96.5.1652
9. Brekke L., Kiang J. et al. (2009). Climate change and water resources management. A federal perspective, USA Geological Survey Circular 1331. 65 Retrieved from pubs.usgs.gov/circ/1331/
10. Bruvoll A., Nyborg K. (2004). The Cold Shiver of Not Giving Enough: On the Social Cost of Recycling Campaigns. Land Economics, 80: 4, 539-549. doi: https://doi.org/10.2307/3655809">doi.org/10.2307/3655809">https://doi.org/10.2307/3655809
11. Carraro C., Siniscalco D. (1993). Strategies for the international protection of the environment. Journal of Public Economics. Elsevier, 52 (3), 309-328.
12. Carraro C., Siniscalco D. (1993). Strategies for the Protection of the Environment. Journal of Public Economic, 52, 309-328.
13. Dannenberg A. Sturm B. et al. (2010). Do equity preferences matter for climate negotiators? Environmental and Resource Economics, 47(1), 91-109. doi: https://doi.org/10.1007/s10640-010-9366-5">doi.org/10.1007/s10640-010-9366-5">https://doi.org/10.1007/s10640-010-9366-5
14. Finus M. (2001). Game Theory and International Environmental Cooperation. Cheltenham: Edward Elgar.
15. Fullerton D., Kinnaman T. (1996, September). Household Responses to Pricing Garbage by the Bag. American Economic Review, 86 (4), 971-984. doi: https://doi.org/10.3386/w4670">doi.org/10.3386/w4670">https://doi.org/10.3386/w4670
16. Hage O. Soderholm P. et al.(2009) Norms and Economic Motivation in Household Recycling: Empirical Evidence from Sweden. Resources. Conservation and Recycling, 53: 3, 155-165. doi: https://doi.org/10.1016/j.resconrec.2008.11.003">doi.org/10.1016/j.resconrec.2008.11.003">https://doi.org/10.1016/j.resconrec.2008.11.003
17. Hasson R., Löfgren Å. et al. (2010). Climate change in a public goods game: Investment decision in mitigation versus adaptation. Ecological Economics, 70: 2, 331-338. doi: https://doi.org/10.1016/j.ecolecon.2010.09.004">doi.org/10.1016/j.ecolecon.2010.09.004">https://doi.org/10.1016/j.ecolecon.2010.09.004
18. Irlenbusch B., Sliwka D. (2005). Incentives, Decision Frames, and Motivation Crowding Out – An Experimental Investigation.
19. Kahneman, D., Tversky, A. (2000). Choices, values and frames. New York: Cambridge University Press and the Russell Sage Foundation
20. Lange A. (2006). The impact of equity-preferences on the stability of international environmental agreements. Environmental and Resource Economics, 34 (2), 247-267. doi: https://doi.org/10.1007/s10640-005-0006-4">doi.org/10.1007/s10640-005-0006-4">https://doi.org/10.1007/s10640-005-0006-4
21. Leiserowitz A. (2006). Climate Change Risk Perception and Policy Preferences: The Role of Affect, Imagery, and Values. Climatic Change, 77: 1-2, 45-72. doi: https://doi.org/10.1007/s10584-006-9059-9">doi.org/10.1007/s10584-006-9059-9">https://doi.org/10.1007/s10584-006-9059-9
22. Milinski M., Semmann D. (2006). Stabilizing the Earth’s climate is not a losing game: Supporting evidence from public goods experiments. Proceedings of the National Academy of Sciences, 103, 3994-3998. doi: https://doi.org/10.1073/pnas.0504902103">doi.org/10.1073/pnas.0504902103">https://doi.org/10.1073/pnas.0504902103
23. Milinski M., Semmann D. et al. (2008). The collective-risk social dilemma and the prevention of simulated dangerous climate change. Proceedings of the National Academy of Science of the USA, 105.
24. Miranda M., Aldy J. (1998, January). Unit Pricing of Residential Municipal Solid Waste: Lessons from Nine Case Study Communities. Journal of Environmental Management, 52 (1), 79-93. doi: https://doi.org/10.1006/jema.1997.0161">doi.org/10.1006/jema.1997.0161">https://doi.org/10.1006/jema.1997.0161
25. Rege M., Telle K. (2004). The impact of social approval and framing on cooperation in public good situations. Journal of Public Economics, 88, 1625-1644. doi: https://doi.org/10.1016/s0047-2727(03)00021-5">doi.org/10.1016/s0047-2727(03)00021-5">https://doi.org/10.1016/s0047-2727(03)00021-5
26. Tavoni A., Dannenberg A. et al. (2011). Inequality, communication, and the avoidance of disastrous climate change in a public goods game. Proceedings of the National Academy of Sciences of the United States of America, 108, 11825-11829. doi: https://doi.org/10.1073/pnas.1102493108">doi.org/10.1073/pnas.1102493108">https://doi.org/10.1073/pnas.1102493108
27. Viscusi W., Zeckhauser R. (2006). National survey evidence on disasters and relief: Risk beliefs, self-interest, and compassion. Journal of Risk and Uncertainty, Springer, 33(1), 13-36. doi: https://doi.org/10.1007/s11166-006-0169-6">doi.org/10.1007/s11166-006-0169-6">https://doi.org/10.1007/s11166-006-0169-6
28. Young O. (2011). The Effectiveness of International Environmental Regimes: Comparing and Contrasting Findings from Quantitative Research. International Studies Review, 13: 4, 579-605. doi: https://doi.org/10.1111/j.1468-2486.2011.01045.x">doi.org/10.1111/j.1468-2486.2011.01045.x">https://doi.org/10.1111/j.1468-2486.2011.01045.x
KOZIUK Viktor 1, IVASHUK Yurii 2
1West Ukrainian National University
2Ternopil National Economic University
Behavioral basis for building self-stimulating environmental regimes
Ekon. teor. 2019; 4:29-41 |
ABSTRACT ▼
The effectiveness of self-stimulating environmental regimes in unsteady economic systems is considered in the article on the basis of the conducted behavioral experiment. It is shown that rational choice, as a methodological basis is not always a sufficient prerequisite for the development of effective environmental regimes. It is substantiated that the initial level of well-being may determine the preferences of economic entities regarding environmental benefits. It is noted that in conditions of low priority of social welfare and ecology, at the individual level there is no reason to believe that collective actions to increase the supply of environmental goods will be successful. It is revealed that the potential for replication of altruistic strategies is rather weak, and they are almost entirely offset by rentinvading behavior, while collective actions do not generate a proper emergent order in which opportunistic behavior would be subject to more stringent restrictions. In general, the results of the experiment indicate an increase in the effect of the gap between the individual rational rent-invading choices and the collective result, which leads to the degradation of the environment, which accordingly calls into question the expediency of creating a decentralized mechanism for financing the benefit of «clean ecology» in Ukraine. It is substantiated that in the short term, the very tools of environmental policy that will be based on the use of individuals to benefit from the implementation of such a policy and pushing them out will be potentially successful. However, in the long run, the improvement of the situation in the field of environmental goods may be based on changes in pref-erences that are not always strictly determined by the level of income, in particular, environmental policy should be associated with those changes in institutional quality and education that would be relevant to changes in preferences.
Keywords:behavioral experiment, public goods, ecological regime, rational choice, economic operators' preferences
JEL: Q58, E70
REFERENCES ▼
2. Arrow K. (1987). Rationality of self and others in an economic system / in Hogarth, Robin M.; Reder, Melvin W. (eds.), Rational choice: the contrast between economics and psychology, Chicago: The University of Chicago Press.
3. Barrett S. (1994). Self-enforcing International Environmental Agreements. Oxford Economic Papers, 46, 878-894. doi: doi.org/10.1093/oep/46.supplement_1.878
4. Barrett S. ( 2006). Climate Treaties and "Breakthrough" Technologies. American Economic Review, 96 (2), 22-25.
5. Barrett S., Dannenberg A. (2012). Climate negotiations under scientific uncertainty. Proceedings of the National Academy of Sciences of the United States of America,109, 17372-17376. doi: doi.org/10.1073/pnas.1208417109
6. Baumol W., Oates W. (1988). The Theory of Environmental Policy, 2nd Edition. Cambridge University Press. Cambridge.
7. Becker G. (1976). The Economic Approach to Human Behavior / The University of Chicago Press.
8. Bénabou R., Tirole J. (2006a). Incentives and Prosocial Behavior. American Economic Review, 96 (5), 1652-1678. doi: doi.org/10.1257/aer.96.5.1652
9. Brekke L., Kiang J. et al. (2009). Climate change and water resources management. A federal perspective, USA Geological Survey Circular 1331. 65 Retrieved from http: //pubs.usgs.gov/circ/1331/
10. Bruvoll A., Nyborg K. (2004). The Cold Shiver of Not Giving Enough: On the Social Cost of Recycling Campaigns. Land Economics, 80: 4, 539-549. doi: doi.org/10.2307/3655809
11. Carraro C., Siniscalco D. (1993). Strategies for the international protection of the environment. Journal of Public Economics. Elsevier, 52(3), 309-328.
12. Carraro C., Siniscalco D. (1993). Strategies for the Protection of the Environment. Journal of Public Economic, 52, 309-328.
13. Dannenberg A. Sturm B. et al. (2010). Do equity preferences matter for climate negotiators? Environmental and Resource Economics, 47(1), 91-109. doi: doi.org/10.1007/s10640-010-9366-5
14. Finus M. (2001). Game Theory and International Environmental Cooperation. Cheltenham: Edward Elgar.
15. Fullerton D., Kinnaman T. (1996, September). Household Responses to Pricing Garbage by the Bag. American Economic Review, 86 (4), 971-984. doi: doi.org/10.3386/w4670
16. Hage O. Soderholm P. et al.(2009) Norms and Economic Motivation in Household Recycling: Empirical Evidence from Sweden. Resources. Conservation and Recycling, 53: 3, 155-165. doi: doi.org/10.1016/j.resconrec.2008.11.003
17. Hasson R., Löfgren Å. et al. (2010). Climate change in a public goods game: Investment decision in mitigation versus adaptation. Ecological Economics, 70: 2, 331-338. doi: doi.org/10.1016/j.ecolecon.2010.09.004
18. Irlenbusch B., Sliwka D. (2005). Incentives, Decision Frames, and Motivation Crowding Out – An Experimental Investigation.
19. Kahneman, D., Tversky, A. (2000). Choices, values and frames. New York: Cambridge University Press and the Russell Sage Foundation
20. Lange A. (2006). The impact of equity-preferences on the stability of international environmental agreements. Environmental and Resource Economics, 34 (2), 247-267. doi: doi.org/10.1007/s10640-005-0006-4
21. Leiserowitz A. (2006). Climate Change Risk Perception and Policy Preferences: The Role of Affect, Imagery, and Values. Climatic Change, 77: 1-2, 45-72. doi: doi.org/10.1007/s10584-006-9059-9
22. Milinski M., Semmann D. (2006). Stabilizing the Earth’s climate is not a losing game: Supporting evidence from public goods experiments. Proceedings of the National Academy of Sciences, 103, 3994-3998. doi: doi.org/10.1073/pnas.0504902103
23. Milinski M., Semmann D. et al. (2008). The collective-risk social dilemma and the prevention of simulated dangerous climate change. Proceedings of the National Academy of Science of the USA, 105.
24. Miranda M., Aldy J. (1998, January). Unit Pricing of Residential Municipal Solid Waste: Lessons from Nine Case Study Communities. Journal of Environmental Management, 52 (1), 79-93. doi: doi.org/10.1006/jema.1997.0161
25. Rege M., Telle K. (2004). The impact of social approval and framing on cooperation in public good situations. Journal of Public Economics, 88, 1625-1644. doi: doi.org/10.1016/s0047-2727(03)00021-5
26. Tavoni A., Dannenberg A. et al. (2011). Inequality, communication, and the avoidance of disastrous climate change in a public goods game. Proceedings of the National Academy of Sciences of the United States of America, 108, 11825-11829. doi: doi.org/10.1073/pnas.1102493108
27. Viscusi W., Zeckhauser R. (2006). National survey evidence on disasters and relief: Risk beliefs, self-interest, and compassion. Journal of Risk and Uncertainty, Springer, 33(1), 13-36. doi: doi.org/10.1007/s11166-006-0169-6
28. Young O. (2011). The Effectiveness of International Environmental Regimes: Comparing and Contrasting Findings from Quantitative Research. International Studies Review, 13: 4, 579-605. doi: doi.org/10.1111/j.1468-2486.2011.01045.x
№ 1/2020
1West Ukrainian National University
Independence of central banks and inflation: which institutional factors are more important?
Ekon. teor. 2020; 1:94-119 | https://doi.org/10.15407/etet2020.01.094 |
ABSTRACT ▼
Which institutional factors substantially affect macroeconomic performance or regulatory design is still under question and is discussed heavily. Institutional qual-ity variables are often opposed to variables that are cultural attributes. The prob-lem of relations between central banks independence and inflation also could be considered from that discussion viewpoint. From one point of view, culture should shape preferences that are expected to be converted into public choice. From another, institutional quality determines how preferences are correlated with particular policy-making following the initially taken commitments. The paper introduces the hypothesis that quality of institutions should override the cultural attrib-utes as an inflation performance factor. It is because of some reasons. Cultural attributes may affect macroeconomic performance produced by regulators in opposite ways. As well, institutional quality may distort relations between culture, preferences and public choice. This hypothesis is tested empirically. The basic regression based on variables that are proxies for institutional quality and policy-mix is added by variables from World Values Map and Hofstede cultural attributes. It is found that law enforcement is the most statistically meaningful variable. Central bank independence is also counter-inflationary as traditional theory assumes. The same applies to fiscal buffers and smaller resource endowments. Political regime is also important but fractionalization of society demonstrates some ambiguity. Survival values are proinflationary in democracies. But power distance could be counter-inflationary in some cases opposite to standard view. At the same time, relations between cultural proxies and inflation are not always obvious and should be considered in the particular institutional context. The general conclusion is that variables that are closer matching policy-making process are better in shaping the macroeconomic performance. Due to this, quality of institutions as well as institutional design of regulators are better in capturing macroeconomic performance than cultural drivers of potential macroeconomic preferences.
Keywords:central banks independence, inflation, quality of institutions, cultural attributes, rule of law, political regimes
JEL: E58, E59, O23, Q33
Article in Russian (pp. 94 - 119) | Download | Downloads :327 |
Article in Ukrainian (pp. 94 - 119) | Download | Downloads :268 |
REFERENCES ▼
2. Koziuk, V. (2018, June). Price Stability and Inflation Targeting in Commodity Economies: Macroeconomics versus a Political Economy? Visnyk NBU – Visnyk of the National Bank of Ukraine, 244, 4-25. [in Ukrainian]. doi.org/10.26531/vnbu2018.244.01.
3. Koziuk, V. (2019). Independence of central banks and inflation: fragmentization of society vs the right of law. Finansy Ukrainy – Finance of Ukraine, 3, 7-21. [in Ukrainian]. doi.org/10.33763/finukr2019.03.007
4. Koziuk, V.V., Dluhopolskyi, O.V. (2017). Power Distance And Value Orientations Influence On Oligarchism And Crony-Sectors Development In Modern Ecomnomic Systems. Visnyk Kyivskoho natsionalnoho universytetu imeni Tarasa Shevchenka. Seriia Ekonomichna – Bulletin of Taras Shevchenko National University of Kyiv. Economics, 4(193), 30-37. [in Ukrainian]. doi.org/10.17721/1728-2667.2017/193-4/5
5. Nort, D., Wallis, J., Weingast, B. Violence and social orders: a conceptual framework for interpreting recorded human history. Kyiv: Nash format [in Ukrainian].
6. Acemoglu, D., Robinson, J. (2012). Why Nations Fail: The Origins of Power, Prosperity, and Poverty. NY: Crown Business. doi.org/10.1355/ae29-2j
7. Acharya, V. (2015). Financial Stability in the Broader Mandate for Central Banks: A Political Economy Perspective. Hutchins Center on Fiscal and Monetary Policy at Brookings Working Paper, 11, 1-19.
8. Alesina, A., Devleeschauwer, A., Easterly, W. (2002). Fractionalization. NBER Working Paper, 9411, 1-72. doi.org/10.2139/ssrn.319762
9. Arnone, M., Laurence, B., Segalotto, J.-F., Sommer, M. (2007). Central Bank Autonomy: Lessons from Global Trends. IMF Working Paper, WP/07/88: 1-53. doi.org/10.5089/9781451866520.001
10. Berggren, N., Daunfeldt, S.-O., Hellstrom, J. (2012). Social Trust and Central Bank Independence”. Paper Presented at World Congress of Public Choice Societies, Miami, 1-23. doi.org/10.2139/ssrn.2065320
11. Berggren, N., Daunfeldt, S.-O., Hellstrom, J. (2014). Does Social Trust Speed Up Reforms? The Case of Central Bank Independence. Stockholm Research Institute of Industrial Economics, 1-24. doi.org/10.2139/ssrn.2546809
12. Cihak, M. (2010). Price Stability, Financial Stability, and Central Bank Independence. Oesterreichische Nationalbank 38th Economic Conference. Wiena.
13. Crowe, C., Meade, E. (2008). Central Banks Independence and Transparency: Evolution and Effectiveness. IMF Working Paper, WP/08/119: 1-30. doi.org/10.5089/9781451869798.001
14. Cukierman, A. (1992). Central Banking Strategy, Credibility, and Independence: Theory and Evidence. Cambridge, Mass.: MIT Press. doi.org/10.1515/jeeh-1992-0410
15. Dincer, N., Eichengreen, B. (2014, March). Central Bank Transparency and Independence: Updates and New Measures. International Journal of Central Banking, 10: 1, 189-253. doi.org/10.2139/ssrn.2579544
16. Haan J. de, Masciandro D., Quintyn M. (Eds.). (2008). Does Central Bank Independence Still Matter. European Journal of Political Economy, 24: 4, 717-848. doi.org/10.1016/j.ejpoleco.2008.09.005
17. Eijffinger, S., Schaling, E. (1993, March). Central Bank Independence in Twelve Industrial Countries. Banca Nazionale del Lavoro Quarterly Review, 184, 49-89.
18. Eijffinger, S., Stadhouders, P. (2003). Monetary Policy and Rule of Law. CEPR Discussion Paper, 3698.
19. Georgsson, M., Vredin, A., Sommar, P.A. (2015). The Modern Central Bank’s Mandate and the Discussion Following the Financial Crisis. Sveriges Riksbank Economic Review, 1, 7-42.
20. Gollwitzer, S., Quintyn, M. (2010). The Effectiveness of Macroeconomic Commitment in Weak(er) Institutional Environments. IMF Working Paper, WP/10/193, 1-58. doi.org/10.5089/9781455205233.001
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23. IMF (2015, Sept.). Monetary Policy and Financial Stability. Staff Report.
24. Jacome, L. (2001). Legal Central Bank Independence and Inflation in Latin America During the 1990s. IMF Working Paper, WP/01/212, 1-40. doi.org/10.5089/9781451874891.001
25. Jacome, L., Vazquez, F. (2005). Any Link Between Legal Central Bank Independence and Inflation? Evidence from Latin America and the Caribbean. IMF Working Paper, WP/05/75, 1-41. doi.org/10.5089/9781451860948.001
26. Jong, E. de (2002). Why Are Price Stability and Statutory Independence of Central Banks Negatively Correlated? The Role of Culture. European Journal of Political Economy, 18, 675-694. doi.org/10.1016/S0176-2680(02)00114-3
27. Jost, A. (2018). Cultural Differences in Monetary Policy Preferences. Swiss National Bank Working Paper, 2, 1-36.
28. Keefer, P., Stasavage, D. (2003). The Limits of Delegation: Veto Players, Central Bank Independence, and the Credibility of Monetary Policy. American Political Science Review, 97(3), 593-621. doi.org/10.1017/S0003055403000777
29. Koziuk, V. (2016, March). Independence of Central Banks in Commodity Economies. Gerald of National Bank of Ukraine, 6-25. doi.org/10.26531/vnbu2016.235.006
30. La Porta, R., Lopez de Silanes, F., Shleifer, A., Vishny, R. (1999). The Quality of Government. Journal of Law, Economics, and Organization, 15(1), 222-279. doi.org/10.1093/jleo/15.1.222
31. Lybeck, T. (1998). Elements of Central Bank: Autonomy and Accountability. IMF Occasional Paper, OP/98/1. doi.org/10.5089/9781451975192.001
32. Masciandro, D., Quintyn, M., Taylor, M. (2008). Inside and Outside the Central Bank: Independence and Accountability in Financial Supervision: Trends and Determinants. European Journal of Political Economy, 24: 4, 833-848. doi.org/10.1016/j.ejpoleco.2008.07.005
33. Masciandro, D., Romelli, D. (2018). Beyond Central Bank Independence Veil: New Evidence. Bocconi University Working Paper, 71, 1-36. doi.org/10.2139/ssrn.3126179
34. Maslowska, A. (2012). Studies on Institutions and Central Bank Independence. Turku School of Economics. Series A-1.
35. Mauro, P. (1995). Corruption and Growth. Quarterly Journal of Economics, 110(3), 681-712. doi.org/10.2307/2946696
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37. Nurbayev, D. (2017). The Rule of Law, Central Bank Independence and Price Stability. Journal of Institutional Economics, 14(4), 659-687. doi.org/10.1017/S1744137417000261
38. Satyanath, Sh., Subramanian, A. (2004). What Determines Long-Run Macroeconomic Stability? Democratic Institutions. IMF Working Paper, WP/04/215, 1-51. doi.org/10.5089/9781451875072.001
39. Smets, F. (2014). Financial Stability and Monetary Policy: How Closely Interlinked? International Journal of Central Banking, 10(2), 263-300.
40. Tognato, C. (2012). Central Bank Independence: Cultural Codes and Symbolic Performance. NY: Palgrave Macmillan. doi.org/10.1057/9781137268839
№ 2/2021
1West Ukrainian National University
Digital currencies: a problem of trust
Ekon. teor. 2021; 2:93-117 | https://doi.org/10.15407/etet2021.02.093 |
ABSTRACT ▼
The rising cryptocurrencies have revived discussion about the prospects of monetary order and the central bank’s role in it. Functionality is in the core of the competition between the forms of money and the payment landscape could be fractionalized affecting further decline in the efficiency of monetary policy. Central bank digital currency (CBDC) is looked by monetary authorities as a way to respond to technological challenge and fulfill the gap of the market failure related to some imperfections of privately issued digital money. The success of each money form is dependent on the trust as a collective experience. The paper raises the question if the central banks are more credible than private digital money when probable change in the age structure matters for the spread of fintech. Based on empirical analysis, it is found that economic agents differentiate digital money of central banks from those of private issuers. Private cryptocurrencies are considered more reliable when inflationary experience is stronger, while central banks’ independence level and financial stability are not factors of higher trust to CBDC.
Also, a country’s institutional features do not indicate that successful central banks can use the “the umbrella” of trust to their own cryptocurrencies while the factors of technological advance fail to show a clear significance. Social capital better contributes to the trust to private digital money. At the same time, the age structure is the strong factor due to which digital currencies are more reliable in younger societies. It is concluded that in the case then trust in cryptocurrencies is not grounded on institutional factors that historically contributed to stability of the monetary order, preconditions for the latter’s higher vulnerability are likely to rise. With the growing role of age structure as a factor of higher trust to digital money, the quality of social interactions will become a very important institutional precondition for the stability of monetary order.
Keywords:central bank digital currency, money confidence, cryptocurrencies, population age structure, quality of institutions
JEL: E41, E42, E51, E58, G20
Article in Russian (pp. 93 - 117) | Download | Downloads :185 |
Article in Ukrainian (pp. 93 - 117) | Download | Downloads :125 |
REFERENCES ▼
2. Agur, I, Ari, A., Dell’Ariccia, G. (2019). Designing Central Bank Digital Currencies. IMF Working Paper. WP/19/252, 1-38. doi.org/10.5089/9781513519883.001
3. Algietta, M., Orlean, A. (2002). Whence and Whither Money? The Future of Money. Paris: OECD, 123-145.
4. Barontini, Ch., Holde, H. (2019). Proceeding with caution – a survey on central bank digital currency. BIS Paper, 101, 1-24.
5. Bech, M., Garratt, R. (Sept., 2017). Central Bank Cryptocurrencies. BIS Quarterly Review, 55-70.
6. Big Tech in Finance: Opportunities and Risks. (2019). BIS Annual Economic Report. Chapter III, 55-79.
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