Abstract
The transition strategy from administratively set interest rates to market rates is discussed. Despite worldwide trends toward financial liberalization, few monetary authorities are prepared to accept as reasonable any interest rate level that is market determined. The paper suggests some helpful indicators to assess the adequacy of interest rates and discusses factors that contribute to a smooth liberalization process. The main conclusion is that interest rate liberalization is not synonymous with laissez-faire policies, but requires the replacement of the administratively set interest rates by indirect monetary management techniques that operate through the market.
Volume 37 (1990) comprises four issues, as follows:
March, pages 1–194
June, pages 195–452
September, pages 453–734
December, pages 735–906.
Authors
Adams, Charles, and David T. Coe. A Systems Approach to Estimating Natural Rate of Unemployment and Potential Output for the United States 232
Agenor, Pierre-Richard. Stabilization Policies in Developing Countries with a Parallel Market for Foreign Exchange: A Formal Framework 560
Amirkhalkhali, Saleh, and Atul A. Dar, Current Account Imbalances and Capital Formation in Industrial Countries: Comment on Penati and Dooley 726
Bayoumi, Tamim. Saving-Investment Correlations: Immobile Capital, Government Policy, or Endogenous Behavior? 360
Bhandari, Jagdeep S., and Carlos A. Végh. Dual Exchange Markets Under Incomplete Separation: An Optimizing Model 146
Bhandari, Jagdeep S., Nadeem U. Haque, and Stephen J. Turnovsky. Growth, External Debt, and Sovereign Risk in a Small Open Economy 388
Borensztein, Eduardo, and George Pennacchi. Valuation of Interest Payment Guarantees on Developing Country Debt 806
Bovenberg, A. Lans, and Owen Evans. National and Personal Saving in the United States: Measurement and Analysis of Recent Trends 636
Calvo, Guillermo A., and Pablo E. Guidotti. Credibility and Nominal Debt: Exploring the Role of Maturity in Managing Inflation 612
Calvo, Guillermo A., and Carlos A. Végh. Interest Rate Policy in a Small Open Economy: The Predetermined Exchange Rates Case 753
Chadha, Bankim. Real Exchange Rate and Output Variability: The Role of Sticky Prices 593
Coe, David T. Structural Determinants of the Natural Rate of Unemployment in Canada 94
Coe, David T., and Charles Adams. A Systems Approach to Estimating the Natural Rate of Unemployment and Potential Output for the United States 232
Corker, Robert. Wealth, Financial Liberalization, and the Demand for Money in Japan 418
Cornelius, Peter K. Monetary Indexation and Revenues from Money Creation: The Case of Iceland 825
Cottarelli, Carlo, and Mauro Mecagni, The Risk Premium on Italian Government Debt, 1976–88 865
Dar, Atul A., and Saleh Amirkhalkhali. Current Account Imbalances and Capital Formation in Developing Countries: Comment on Penati and Dooley 726
Demekas, Dimitri G. Labor Market Segmentation in a Two-Sector Model of an Open Economy 849
Evans, Owen, and A. Lans Bovenberg. National and Personal Saving in the United States: Measurement and Analysis of Recent Trends... 636 Findlay, David W. Expectations and Long-Term Interest Rates: Comment on Bovenberg 433
Findlay, David W. Budget Deficits and Interest Rates: Reply to Spiro 889
Flood, Robert P., and Peter Isard. Monetary Policy Strategies—A Correction: Reply to Lohmann 446
Guidotti, Pablo E., and Carlos A. Végh. Optimal Taxation Policies in the EMS: A Two-Country Model of Public Finance 311
Guidotti, Pablo E., and Guillermo A. Calvo. Credibility and Nominal
Debt: Exploring the Role of Maturity in Managing Inflation 612
Haque, Nadeem U., Jagdeep S. Bhandari, and Stephen J. Turnovsky, Growth, External Debt, and Sovereign Risk in a Small Open Economy 388
Haque, Nadeem U., Kajal Lahiri, and Peter J. Montiel. A Macroeconometric Model for Developing Countries 537
Holzmann, Robert. The Welfare Effects of Public Expenditure Programs Reconsidered 338
Isard, Peter, and Robert P. Flood. Monetary Policy Strategies—A Correction: Reply to Lohmann 446
Kaminsky, Graciela, and Manmohan S. Kumar. Efficiency in Commodity Futures Markets 670
Khan, Mohsin S. The Macroeconomic Effects of Fund-Supported Adjustment Programs 195
Khan, Mohsin S., and Peter J. Montiel. A Marriage Between Fund and Bank Models? Reply to Polak 187
Kremers, Jeroen J.M. Gaining Policy Credibility for a Disinflation: Ireland’s Experience in the EMS 116
Kremers, Jeroen J.M., and Timothy D. Lane. Economic and Monetary Integration and the Aggregate Demand for Money in the EMS.... 777
Kumar, Manmohan S., and Graciela Kaminsky. Efficiency in Commodity Futures Markets 670
Lahiri, Kajal, Nadeem U. Haque, and Peter J. Montiel, A Macroeconometric Model for Developing Countries 537
Lane, Timothy D., and Jeroen J.M. Kremers. Economic and Monetary Integration and the Aggregate Demand for Money in the EMS.... 777
Lehmussaari, Olli-Pekka. Deregulation and Consumption: Saving Dynamics in the Nordic Countries 71
Leite, Sérgio Pereira, and V. Sundararajan. Issues in Interest Rate Management 735
Lohmann, Susanne. Monetary Policy Strategies—A Correction: Comment on Flood and Isard 440
Masson, Paul R., and Ralph W. Tryon. Macroeconomic Effects of Projected Population Aging in Industrial Countries 453
Mecagni, Mauro, and Carlo Cottarelli. The Risk Premium on Italian Government Debt, 1976–88 865
Mirakhor, Abbas, and Delano Villanueva. Strategies for Financial Reforms: Interest Rate Policies, Stabilization, and Bank Supervision in Developing Countries 509
Montiel, Peter J., and Mohsin S. Khan. A Marriage Between Fund and Bank Models? Reply to Polak 187
Montiel, Peter J., Nadeem U. Haque, and Kajal Lahiri, A Macroeconometric Model for Developing Countries 537
Ohno, Kenichi. Exchange Rate Fluctuations, Pass-Through, and Market Share 294
Ohno, Kenichi. Estimating Yen/Dollar and Mark/Dollar Purchasing Power Parities 700
Pennacchi, George, and Eduardo Borensztein. Valuation of Interest Payment Guarantees on Developing Countries 806
Polak, Jacques J. A Marriage Between Fund and Bank Models? Comment on Khan and Montiel 183
Reinhart, Carmen M. A Model of Adjustment and Growth: An Empirical Analysis 168
Sahay, Ratna. Trade Policy and Excess Capacity in Developing Countries 486
Smith, Roger S. Factors Affecting Saving, Policy Tools, and Tax Reform: A Review 1
Spiro, Peter S. The Effect of Government Debt on Short-Term Real Interest Rates: Comment on Findlay 881
Sundararajan, V., and Sérgio Pereira Leite. Issues in Interest Rate Management 735
Tryon, Ralph W., and Paul R. Masson. Macroeconomic Effects of Projected Population Aging in Industrial Countries 453
Turnovsky, Stephen J., Jagdeep S. Bhandari, and Nadeem U. Haque. Growth, External Debt, and Sovereign Risk in a Small Open Economy 388
Végh, Carlos A., and Jagdeep S. Bhandari. Dual Exchange Markets Under Incomplete Separation: An Optimizing Model 146
Végh, Carlos A., and Pablo E. Guidotti. Optimal Taxation Policies in the EMS: A Two-Country Model of Public Finance 311
Végh, Carlos A., and Guillermo A. Calvo. Interest Rate Policy in a Small Open Economy: The Predetermined Exchange Rates Case 753
Villanueva, Delano, and Abbas Mirakhor. Strategies for Financial Reforms: Interest Rate Policies, Stabilization, and Bank Supervision in Developing Countries 509
Titles
Budget Deficits and Interest Rates: Reply to Spiro. By David W. Findlay 889
Credibility and Nominal Debt: Exploring the Role of Maturity in Managing Inflation. By Guillermo A, Calvo and Pablo E. Guidotti 612
Current Account Imbalances and Capital Formation in Industrial Countries: Comment on Penati and Dooley. By Atul A. Dar and Saleh Amirkhalkhali 726
Deregulation and Consumption: Saving Dynamics in the Nordic Countries. By Olli-Pekka Lehmussaari 71
Dual Exchange Markets Under Incomplete Separation: An Optimizing Model. By Jagdeep S. Bhandari and Carlos A. Végh 146
Economic and Monetary Integration and the Aggregate Demand for Money in the EMS. By Jeroen J.M. Kremers and Timothy D. Lane 777
The Effect of Government Debt on Short-Term Real Interest Rates: Comment on Findlay. By Peter S. Spiro 881
Efficiency in Commodity Futures Markets. By Graciela Kaminsky and Manmohan S. Kumar 670
Estimating Yen/Dollar and Mark/Dollar Purchasing Power Parities. By Kenichi Ohno 700
Exchange Rate Fluctuations, Pass-Through, and Market Share. By Kenichi Ohno 294
Expectations and Long-Term Interest Rates: Comment on Bovenberg. By David W, Findlay 433
Factors Affecting Saving, Policy Tools, and Tax Reforms: A Review. By Roger S. Smith 1
Gaining Policy Credibility for a Disinflation: Ireland’s Experience in the EMS. By Jeroen J.M. Kremers 116
Growth, External Debt, and Sovereign Risk in a Small Open Economy. By Jagdeep S. Bhandari, Nadeem U. Haque, and Stephen J. Turnovsky 388
Interest Rate Policy in a Small Open Economy: The Predetermined Exchange Rates Case. By Guillermo A. Calvo and Carlos A. Végh 753
Issues in Interest Rate Management. By Sérgio Pereira Leite and V. Sundararajan 735
Labor Market Segmentation in a Two-Sector Model of an Open Economy. By Dimitri G. Demekas 849
A Macroeconometrie Model for Developing Countries. By Nadeem U. Haque, Kajal Lahiri, and Peter J. Montiel 537
A Marriage Between Fund and Bank Models? Comment on Khan and Montiel. By Jacques J. Polak 183
A Marriage Between Fund and Bank Models? Reply to Polak. By Mohsin S. Khan and Peter J. Montiel 187
The Macroeconomic Effects of Fund-Supported Programs. By Mohsin S. Khan 195
Macroeconomic Effects of Projected Population Aging in Industrial Countries. By Paul R. Masson and Ralph W. Tryon 453
A Model of Adjustment and Growth: An Empirical Analysis. By Carmen M. Reinhart 168
Monetary Indexation and Revenues from Money Creation: The Case of Iceland. By Peter K. Cornelius 825
Monetary Policy Strategies—A Correction: Comment on Flood and Isard, By Susanne Lohmann 440
Monetary Policy Strategies—A Correction: Reply to Lohmann. By Robert P. Flood and Peter Isard 446
National and Personal Saving in the United States: Measurement and Analysis of Recent Trends. By A. Lans Bovenberg and Owen Evans 636
Optimal Taxation Policies in the EMS: A Two-Country Model of Public Finance. By Carlos A. Végh and Pablo E. Guidotti 311
Real Exchange Rate and Output Variability: The Role of Sticky Prices. By Bankim Chadha 593
The Risk Premium on Italian Government Debt, 1976–88. By Carlo Cottarelli and Mauro Mecagni 865
Saving-Investment Correlations: Immobile Capital, Government Policy, or Endogenous Behavior? By Tamim Bayoumi 360
Stabilization Policies in Developing Countries with a Parallel Market for Foreign Exchange: A Formal Framework. By Pierre-Richard Agenor 560
Strategies for Financial Reforms: Interest Rate Policies, Stabilization, and Bank Supervision in Developing Countries. By Delano Villanueva and Abbas Mirakhor 509
Structural Determinants of the Natural Rate of Unemployment in Canada. By David T. Coe 94
A Systems Approach to Estimating the Natural Rate of Unemployment and Potential Output for the United States. By Charles Adams and David T. Coe 232
Trade Policy and Excess Capacity in Developing Countries. By Ratna Sahay 486
Valuation of Interest Payment Guarantees on Developing Country Debt. By Eduardo Borensztein and George Pennacchi 806
The Welfare Effects of Public Expenditure Programs Reconsidered. By
Robert Holzmann 338
Wealth, Financial Liberalization, and the Demand for Money in Japan. By Robert Corker 418
Subjects
To facilitate electronic storage and retrieval of bibliographic data, Staff Papers has adopted the subject classification scheme of the Journal of Economic Literature (Nashville, Tennessee).
023 Macroeconomic Theory
Deregulation and Consumption: Saving Dynamics in the Nordic Countries. By Olli-Pekka Lehmussaari 71
Growth, External Debt, and Sovereign Risk in a Small Open Economy. By Jagdeep S. Bhandari, Nadeem U. Haque, and Stephen J. Turnovsky 388
Real Exchange Rate and Output Variability: The Role of Sticky Prices. By Bankim Chadha 593
National and Personal Saving in the United States: Measurement and Analysis of Recent Trends. By A. Lans Bovenberg and Owen Evans 636
024 Welfare Theory
The Welfare Effects of Public Expenditure Programs Reconsidered. By Robert Holzmann 338
110 Economic Growth; Development; Planning Theory and Policy
A Systems Approach to Estimating the Natural Rate of Unemployment and Potential Output for the United States. By Charles Adams and David T. Coe 232
113 Economic Planning Theory and Policy
A Model of Adjustment and Growth: An Empirical Analysis. By Carmen M. Reinhart 168
121 Economic Studies of Developing Countries
A Model of Adjustment and Growth: An Empirical Analysis. By Carmen M. Reinhart 168
Growth, External Debt, and Sovereign Risk in a Small Open Economy. By Jagdeep S. Bhandari, Nadeem U. Haque, and Stephen J. Turnovsky 388
Strategies for Financial Reforms: Interest Rate Policies, Stabilization, and Bank Supervision in Developing Countries. By Delano Villanueva and Abbas Mirakhor 509
122 Economic Studies of Developed Countries
Monetary Indexation and Revenues from Money Creation: The Case of Iceland. By Peter K. Cornelius 825
130 Economic Fluctuations; Forecasting; Stabilization; Inflation
A Systems Approach to Estimating the Natural Rate of Unemployment and Potential Output for the United States. By Charles Adams and David T. Coe 232
Efficiency in Commodity Futures Markets. By Graciela Kaminsky and Manmohan S. Kumar 670
131 Economic Fluctuations
A Maeroeconometrie Model for Developing Countries. By Nadeem U. Haque, Kajal Lahiri, and Peter J. Montiel 537
Stabilization Policies in Developing Countries with a Parallel Market for Foreign Exchange: A Formal Framework. By Pierre-Richard Agénor 560
133 General Outlook and Stabilization Theories and Policies
The Macroeconomic Effects of Fund-Supported Programs. By Mohsin S. Khan 195
211 Econometric and Statistical Methods and Models
Efficiency in Commodity Futures Markets. By Graciela Kaminsky and Manmohan S. Kumar 670
212 Construction, Analysis, and Use of Econometric Models
The Macroeconomic Effects of Fund-Supported Programs. By Mohsin S. Khan 195
Estimating Yen/Dollar and Mark/Dollar Purchasing Power Panties. By Kenichi Ohno 700
220 Economic and Social Statistical Data and Analysis
Factors Affecting Saving, Policy Tools, and Tax Reforms: A Review. By Roger S. Smith 1
223 Financial Accounts
Wealth, Financial Liberalization, and the Demand for Money in Japan. By Robert Corker 418
224 National Wealth and Balance Sheets
Macroeconomic Effects of Projected Population Aging in Industrial Countries. By Paul R. Masson and Ralph W. Tryon 453
227 Prices
Estimating Yen/Dollar and Mark/Dollar Purchasing Power Parities. By Kenichi Ohno 700
311 Domestic Monetary and Financial Theory and Policy
Gaining Policy Credibility for a Disinflation: Ireland’s Experience in the EMS. By Jeroen J.M. Kremers 116
Growth, External Debt, and Sovereign Risk in a Small Open Economy. By Jagdeep S. Bhandari, Nadeem U. Haque, and Stephen J. Turnovsky 388
Strategies for Financial Reforms: Interest Rate Policies, Stabilization, and Bank Supervision in Developing Countries. By Delano Villanueva and Abbas Mirakhor 509
Issues in Interest Rate Management. By Sérgio Pereira Leite and V. Sundararajan 735
Economic and Monetary Integration and the Aggregate Demand for Money in the EMS. By Jeroen J.M. Kremers and Timothy D. Lane 777
Monetary Indexation and Revenues from Money Creation: The Case of Iceland. By Peter K. Cornelius 825
The Risk Premium on Italian Government Debt, 1976–88. By Carlo Cottarelli and Mauro Mecagni 865
313 Capital Markets
The Risk Premium on Italian Government Debt, 1976–88. By Carlo Cottarelli and Mauro Mecagni 865
320 Fiscal Theory and Policy; Public Finance
Optimal Taxation Policies in the EMS: A Two-Country Model of Public Finance, By Carlos A. Végh and Pablo E. Guidotti.... 311
Credibility and Nominal Debt: Exploring the Role of Maturity in Managing Inflation. By Guillermo A. Calvo and Pablo E, Guidotti 612
321 Fiscal Theory and Policy
Factors Affecting Saving, Policy Tools, and Tax Reforms: A Survey. By Roger S. Smith 1
The Welfare Effects of Public Expenditure Programs Reconsidered. By Robert Holzmann 338
National and Personal Saving in the United States: Measurement and Analysis of Recent Trends. By A. Lans Bovenberg and Owen Evans 636
The Risk Premium on Italian Government Debt, 1976–88. By Carlo Cottarelli and Mauro Mecagni 865
323 National Taxation, Revenue, and Subsidies
Factors Affecting Saving, Policy Tools, and Tax Reforms: A Survey. By Roger S. Smith 1
400 International Economics
Real Exchange Rate and Output Variability: The Role of Sticky
Prices. By Bankim Chadha 593
411 International Trade Theory
Exchange Rate Fluctuations, Pass-Through, and Market Shares. By Kenichi Ohno 294
Trade Policy and Excess Capacity in Developing Countries. By Ratna Sahay 486
Labor Market Segmentation in a Two-Sector Model of an Open Economy. By Dimitri G. Demekas 849
421 Trade Relations
Macroeconomic Effects of Projected Population Aging in Industrial Countries. By Paul R. Masson and Ralph W. Tryon 453
422 Commercial Policy
Trade Policy and Excess Capacity in Developing Countries. By Ratna Sahay 486
423 Economic Integration
Saving-Investment Correlations: Immobile Capital, Government Policy, or Endogenous Behavior? By Tamim Bayoumi 360
Economic and Monetary Integration and the Aggregate Demand for Money in the EMS. By Jeroen J.M. Kremers and Timothy D. Lane 777
430 International Finance
Optimal Taxation Policies in the EMS: A Two-Country Model of Public Finance. By Carlos A. Végh and Pablo E. Guidotti 311
431 Open Economy Macroeconomics; Exchange Rates
Gaining Policy Credibility for a Disinflation: Ireland’s Experience in the EMS. By Jeroen J.M. Kremers 116
Dual Exchange Markets Under Incomplete Separation: An Optimizing Model. By Jagdeep S. Bhandari and Carlos A. Végh 146
Exchange Rate Fluctuations, Pass-Through, and Market Shares. By Kenichi Ohno 294
Growth, External Debt, and Sovereign Risk in a Small Open Economy. By Jagdeep S. Bhandari, Nadeem U. Haque, and Stephen J. Turnovsky 388
A Macroeconometric Model for Developing Countries. By Nadeem U. Haque, Kajal Lahiri, and Peter J. Montiel 537
Stabilization Policies in Developing Countries with a Parallel Market for Foreign Exchange: A Formal Framework. By Pierre-Richard Agénor 560
Real Exchange Rate and Output Variability: The Role of Sticky Prices. By Bankim Chadha 593
Estimating Yen/Dollar and Mark/Dollar Purchasing Power Parities. By Kenichi Ohno 700
Interest Rate Policy in a Small Open Economy: The Predetermined Exchange Rates Case, By Guillermo A. Calvo and Carlos A. Végh 753
432 International Monetary Arrangements
Dual Exchange Markets Under Incomplete Separation: An Optimizing Model. By Jagdeep S. Bhandari and Carlos A. Végh 146
433 Private International Lending
Saving-Investment Correlations: Immobile Capital, Government
Policy, or Endogenous Behavior? By Tamim Bayoumi 360
Valuation of Interest Payment Guarantees on Developing Country Debt. By Eduardo Borensztein and George Pennacchi 806
441 International Investment and Long-Term Capital Movements
Saving-Investment Correlations: Immobile Capital, Government Policy, or Endogenous Behavior? By Tamim Bayoumi 360
521 Business Finance
Valuation of Interest Payment Guarantees on Developing Country Debt. By Eduardo Borensztein and George Pennacchi 806
611 Market Structure: Industrial Organization and Corporate Strategy
Exchange Rate Fluctuations, Pass-Through, and Market Share. By Kenichi Ohno 294
820 Labor Markets: Public Policy
A Systems Approach to Estimating the Natural Rate of Unemployment and Potential Output for the United States. By Charles Adams and David T. Coe 232
822 Public Policy; Role of Government
Structural Determinants of the Natural Rate of Unemployment in Canada. By David T. Coe 94
824 Labor Market Studies, Wages, Employment
Structural Determinants of the Natural Rate of Unemployment in Canada. By David T. Coe 94
832 Collective Bargaining
Labor Market Segmentation in a Two-Sector Model of an Open Economy. By Dimitri G. Demekas 849
840 Demographic Economics
Macroeconomic Effects of Projected Population Aging in Industrial Countries. By Paul R. Masson and Ralph W, Tryon 453
In statistical matter throughout this issue,
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components of tables may not add to totals shown because of rounding.