COMPARATIVE MACROECONOMIC POLICIES CEU, Economics Department Lecturer: Professor Jacek Rostowski Course: 2 Credits Topics 1. Which dilemmas of policy making under Thatcher and Reagen can be identified in the transition economies of the 1990s? *K.Matthews and P.Minford, Mrs Thatcher s Economic Policies 1979-87, Economic Policy October 1997. O.J.Blanchard, Reaganomics, Economic Policy October 1997. 2. The East Asian Miracle: Myth or Reality? *P.Krugman, The Myth of Asia s Miracle, Foreign Affairs, 1994, pp.62-78. A.Young, Lessons from the Asian NICs: a Contrarian view, European Economic Review, No. 3-4. P.Drysdale, Y.Huang, Technological Catch-up and Economic Growth in East Asia and the Pacific, Economic Record, September 1997. 3. Do you believe that currency/banking crises can be predicted? *G.Kaminsky, S.Lisondo, C.Reinhart, Leading Indicators of Currency Crises, IMF Working Paper, WP/97/79, July 1997. I.Goldfajn, R.Valdes, Are Currency Crises Predictable? IMF Working Paper, WP/97/159, December 1997. 4. Which lessons from economic history do you find useful in explaining the crises of the 1990s?
*M.D.Bordo, A.J.Schwartz, Why Clashes Between Internal and External Stability Goals End in Currency Crises, 1797-1994, in Open Economies Review, 1996, Supplement 1. T.Temezelides, Are Bank Runs Contagious? Federal Reserve Bank of Philadelphia Business Review, November/December, 1997. 5. Assess the macro-economic DIS-advantages of flexible exchange rates for emerging market economies. *Hausmann,R. The Polish Road to the Euro: an envious Latin American view in The Polish Way to the Euro, proceedings of a conference held at the National Bank of Poland, 22-23 October, 2001, pp.4-21.* or Hausmann, R., U.Panizza and E.Stein Why do countries float the way they float? in Financial Vulnerability and Exchange Rate Régimes: Emerging Markets Experience, eds. M.Blejer and M.Skreb, MIT Press, Cambridge Mass., 2002.* Rostowski, J. The Eastern Enlargement of the EU and the Case for Unilateral Euroization in Financial Vulnerability and Exchange Rate Régimes: Emerging Markets Experience, eds. M.Blejer and M.Skreb, MIT Press, Cambridge Mass., 2002.* Habib,M. Financial contagion, interest rates and the role of the exchange rate as a shock absorber in Central and Eastern Europe Bank of Finland Institute for Economies in Transition, Discussion Paper, No.7, 2002.* 6. Was the version of the currency board system adopted in Argentina doomed to failure? P.Pou, The Argentine Experience, in Maintaining Financial Stability in a Global Economy, Federal Reserve Bank of Kansas City, 1997, pp.141-167. *De la Torre, E.Levy and S.Schmukler (2002) Argentina s Financial Crisis: Floating Money, Sinking Banking on http://www.utdt.edu/~ely/papers.html 7. Which form(s) of capital controls may be an appropriate response to the recent currency/financial crises? J.B. de Macedo, D.Cohen, H.Reisen, Monetary Integration for Sustained Convergence: earning rather than importing credibility, pp13-17, in Don t Fix, Don t Float, J.B. de Macedo, D.Cohen, H.Reisen (eds), OECD Development Centre Studies, 2001. *J.Tobin, A Currency Transactions Tax, Why and How, Open Economies Review, 1996, Supplement 1.
Should the IMF Pursue Capital Account Convertibility? (Papers by S.Fischer, R.N.Cooper, R.Dornbusch and D.Roderick), Essays in International Finance, No.207, May 1998. 8. Do transition countries satisfy the OCA requirements for EMU membership? *R.A.Mundell, A Theory of Optimum Currency Areas, American Economic Review, 1961, pp.657-665 (reprinted in Optimal Currency Areas, New Analytucal and Policy Developments, M.Blejer, M.Frenkel, J.Leiderman, A.Razin (eds.), IMF, Washington D.C., 1997, pp.17-28. J.Frenkel, A.Rose, The Endogeneity of the Optimum Currency Area Criteria, in Optimal Currency Areas, New Analytucal and Policy Developments, M.Blejer, M.Frenkel, J.Leiderman, A.Razin (eds.), IMF, Washington D.C., 1997, pp.17-28. Korhonen,I and J.Fidrmuc, Similarity of Supply and Demand Shocks Between the Euro Areaand the Accession Countries in Focus on Transition, 2/2001, pp.26-42, OeNB, Vienna.* 9. Do the Maastricht accession criteria make sense (a) for the founder members of the EMU; (b) for transition applicant countries? *D.Begg, The Design of EMU, mimeo, Birkbeck College, 1997. A.Bratkowski and J.Rostowski, EU Opposition to Unilateral Euroization: Misunderstandings, Real Concerns and Ill-designed Admission Criteria, in A Liberating Economic Journey: Post-Communist Transition, J.Winiecki (ed), CRCE, 2000 (especially the section on the design of the Maastricht criteria). 10. Can EMU survive without massive fiscal transfers? *M.Obstfeld, G.Peri, Asymetric Shocks, Regional non-adjustment and Fiscal Policy, Economic Policy, No.26, 1998, pp.205-259. European Commission Is there a role for discretionary fiscal policy in EMU? in Public Finances in EMU, 2002, on http://europa.eu.int/comm/economy_finance/publications/european_economy/ 2002/ee402en.pdf N.Thygessen, Fiscal Institutions in EMU and the Stability Pact, in Fiscal aspects of European Monetary Integration, A.H.Hallet et al. (eds), CUP 1999, pp.15-37.
11. Will accession to the EU help to reduce unemployment in the transition applicant countries (TACs)? *M.Burda, The Consequences of EU Enlargement for Central and East European Labour Markets, CEPR Discussion Paper, No. 1881, May 1998. F.Canova, M.Ravn, The Macroeconomic Effects of German Unification: Real Adjustments and the Welfare State, CEPR Discussion Paper, No. 2038, December 1998. 12. What caused inter-enterprise debt to explode in some transition economies? *G.Calvo, F.Coricelli, Inter-enterprise Arrears in Economies in Transition in Output Decline in Eastern Europe, R.Holzmann, J.Gacs, G.Winkler (eds), Kluwer, 1995. J.Rostowski, Comment on Calvo and Coricelli, in Output Decline in Eastern Europe, R.Holzmann, J.Gacs, G.Winkler (eds), Kluwer, 1995. 13. How useful were wage controls in stabilizing transition economies? *J.Rostowski, Labour Markets and Wages Policies During Economic Transition, in Macroeconomic Instability in Post-communist Countries, Chapter 6, Oxford, 1998. R.Portes (ed), Economic Transformation in Central Europe: a Progress Report, Centre for Economic Policy Research, all the sections on wage controls. 14. Should Hungary have disinflated faster? *O.Blanchard, Optimal Speed of Disinflation: Hungary, in Moderate Inflation: the Experience of Transition Economies, C.Cotarelli and G.Szapary, IMF and National Bank of Hungary, 1998. Gy.Suranyi, J.Vincze, Inflation in Hungary1990-7, in Moderate Inflation: the Experience of Transition Economies, C.Cotarelli and G.Szapary, IMF and National Bank of Hungary, 1998. 15. Is there a new economy and is Europe missing out on it? *C.Hurst and K.Uppenberg Wonders will never cease: Prospects for a new economy in Europe in Cahiers/Papers European Investment Bank, Vol.6, No.1, 2001, pp9-39.*
*P.Vanhoudt and L.Onorante Measuring economic growth and the new economy in Cahiers/Papers European Investment Bank, Vol.6, No.1, 2001, pp63-83.* P.David Productivity growth prospects and the new economy in historical perspective in Cahiers/Papers European Investment Bank, Vol.6, No.1, 2001, pp 41-61.* 16. What are the implications of the new economy for macroeconomic policy? *Ball,L. and G.Mankiw The NAIRU in Theory and Practice, NBER Working Paper, 8940, May 2002, available on the NBER Website. Cechetti,S.G. The New Economy and the Challenges for the New Economy, NBER Working Paper, 8935, May 2002, available on the NBER Website. Ball,L. and R.Tchaidze The Fed and the New Economy, NBER Working Paper, 8785, February 2002, available on the NBER Website. 17. The political economy of the choice between gradualism and shock therapy. *J.Hellman, Winners Take All: The Politics of Partial Reform in Post- Communist Transitions, World Politics, January 1998. G.Roland, Political Constraints and the Transition Experience, in Lessons form the Economic Transition: Central and Eastern Europe in the 1990s, S.Zecchini (ed), Kluwer-OECD, 1997. J.Fidrmuc, Democracy in transition economies: Grease or sand in the wheels of growth? Cahiers/Papers European Investment Bank, Vol.6, No.2, 2001, pp24-40.* Grading The final mark is comprised of 2 components, presentation (45%) and the final exam (55%).