Note: Some Conditions of Macroeconomic Stability

Hawkins, David; Simon, Herbert A.

doi:10.2307/1905526

Cited by 284 publications

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“…This general solution is consistent with (21) and (28). In order to determine a particular solution, it is necessary to identify the value of r for which u (r) = w.…”

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confidence: 81%

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The Optimal Degree of Exchange Rate Flexibility: a Target Zone Approach*

López

Mendizábal

2007

Rev International Economics

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This paper presents a benchmark model that rationalizes the choice of the degree of exchange rate flexibility. We show that the monetary authority may gain efficiency by reducing volatility of both the exchange rate and the interest rate at the same time. Furthermore, the model is consistent with some known stylized facts in the empirical literature on target zones that previous models were not able to generate jointly, namely, the positive relation between the exchange rate and the interest rate differential, the degree of non-linearity of the function linking the exchage rate to fundamentals and the shape of the exchange rate stochastic distribution.

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“…This general solution is consistent with (21) and (28). In order to determine a particular solution, it is necessary to identify the value of r for which u (r) = w.…”

mentioning

confidence: 81%

“…We use numerical methods to approximate the function u (r t − ρ t ) from conditions (21) and (20). Once the function u (r t − ρ t ) is computed, we use (20) and (3) to find the exchange rate and the interest rate differential, respectively.…”

Section: The Target Zonementioning

confidence: 99%

The Optimal Degree of Exchange Rate Flexibility: a Target Zone Approach*

López

Mendizábal

2007

Rev International Economics

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“…It is Assumption (e) in (1951a, p. 148) or Postulate C 1 in (1951b, p. 53). This property is equivalent to the HawkinsSimon conditions for matrix I − A (Gale and Nikaido 1965;Hawkins 1948;Hawkins and Simons 1949). Invertibility is satisfied in particular if the input-output matrix I − A is diagonal dominant.…”

Section: Consumption Goods As Inputsmentioning

confidence: 99%

Factor proportionality in multiple households closed CGE models: theory and illustrations

Balasko

Tourinho

2014

Econ Theory Bull

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The factor contents of different consumers' consumption bundles computed from a country's CGE model with multiple households are seen to be proportional or almost proportional in the case of four different countries, namely USA, Brazil, Spain and Ivory Coast. These countries have been chosen because of the existence for these countries of CGE models with multiple households (by opposition to a representative consumer) and good quality data. This study has been limited to these four countries because we thought that the implications for CGE modeling of our findings should not delay any further their publication even though further studies are obviously needed. Taken as a law, we show that proportionality of factor contents at equilibrium for all endowment vectors and fixed preferences implies that households' implicit preferences for factor contents are identical and homothetic. Another consequence is that factor and goods' equilibrium prices are unique and depend only on total factor resources, not on the distribution of these factors between households. Factor proportionality may therefore be at the root of the puzzling rigidity and uniqueness of equilibrium prices of goods and factors observed in CGE models with multiple households. Electronic supplementary material The online version of this article

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“…Theorem 3.7 in Miura [4]. 8 In the economics world, this condition is often called the Hawkins-Simon condition because it is believed that this was first proved in Hawkins & Simon [5] published in 1949. However, it was already proved in Ostrowski [6] 10 He said, "This fact, however, gives us no new economic insight into the properties of Leontief models because there is no economic interpretation to be attached to these principal minors."…”

Section: Solvability Condition Of the Economic Input-output Equationmentioning

confidence: 99%

“…5 It is the economic input-output equation. 4 This definition of the self-sufficient rate resembles that of the import coefficient devised by the Japanese authorities (Cf.…”

Section: Formalization Of the Economic Input-output Equationmentioning

confidence: 99%

Solvability of the Economic Input-Output Equation by Time Irreversibility

Miura¹

2014

ALAMT

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This paper reinterprets the economic input-output equation as a description of a realized situation without considering decision making. This paper uses the equation that the self-sufficiency rate is added to the Leontief type, and discusses its solvability. The equation has a unique solution if and only if each part of the relevant society satisfies the space-time openness condition. This condition means that commodities which a part of the relevant society possesses are not all inputted to its inside. Moreover, if the process of input and output is time irreversible, each part of the relevant society satisfies the space-time openness condition. Therefore, the solvability of the equation is guaranteed by time irreversibility. This proposition seems to be relevant to the grandfather paradox which is a type of time paradox.

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Note: Some Conditions of Macroeconomic Stability

Cited by 284 publications

References 0 publications

The Optimal Degree of Exchange Rate Flexibility: a Target Zone Approach*

The Optimal Degree of Exchange Rate Flexibility: a Target Zone Approach*

Factor proportionality in multiple households closed CGE models: theory and illustrations

Solvability of the Economic Input-Output Equation by Time Irreversibility

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