In this paper it is argued that neither the earlier Phillips type of fixed-coefficient or temporary equilibrium models nor the recent Tobin type of portfolio equilibrium models of the money supply process capture the money and credit creating potential of external financial markets. A partial...

The focus of this analysis is on the output costs of disinflation. A model of inflation with both forward and backward elements seems to characterize reality. Such an inflation model is estimated using data for industrial countries, and the output costs of a disinflation path are calculated,...

Unemployment in South Africa is decomposed into a cyclical and a structural component. The estimates suggest that unemployment is largely structural. Alternative explanations for the persistence of deviations of market wages from full-employment levels are examined. Three models that are...

This paper argues that determining the cyclical behavior of prices by applying the same stationarity-inducing transformation to the levels of both output and prices, and examining the correlations of the resulting series, can be misleading. A more appropriate procedure is to examine the...

Issues raised by the evolution of a rapidly growing small economy from a labor-intensive, low-technology production base to a capital-intensive, high-technology, knowledge-and-skill-intensive emphasis as it approaches the limits of its resource constraints in the labor market are examined. A...

This paper develops a model of the process of reallocation of labor from the state sector to the private sector. When growth is exogenously determined, we show that in the initial stages of transition unemployment will rise. After a critical stage in the transition process, restructuring is...

The random walk property of exchange rates is regarded as carrying implications for the kinds of shocks that have driven exchange rates and the models appropriate for analyzing their behavior. This paper describes the results of stochastic simulations of Dornbusch's (1976) sticky-price monetary...

Several questions are addressed about the time-series processes followed by dollar exchange rates. The stochastic process for exchange rates implied by structural models and the conditions under which they would be described by random walks are examined. Tests on the univariate time series for...

This paper analyzes the relationship between the real exchange rate and the business cycle in Japan during the floating rate period. A structural vector autoregression is used to identify different types of macroeconomic shocks that determine fluctuations in aggregate output and the real...

The relationships between the degree of price stickiness and the variability of output and the real exchange rate are investigated in an open economy with flexible exchange rates and capital mobility. A critical degree of price inflexibility is shown to exist below which increased inflexibility...