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Reforms, Exchange Rates and Monetary Commitment: A Panel Analysis for OECD Countries

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  • Ansgar Belke

    ()

  • Bernhard Herz
  • Lukas Vogel

Abstract

The paper investigates the link between monetary policy and structural reforms in open economies. We test three hypotheses: (a) the Calmfors hypothesis that the degree of reforms is higher in the case of autonomous policy and lower in the case of commitment, (b) the TINA hypothesis which implies a positive impact of a monetary policy rule on the extent of reforms, and (c) a third factors hypothesis. In our empirical analysis on panel data of 23 OECD countries from 1980–2000 we find little evidence for the Calmfors hypothesis, but evidence in favor of the TINA argument for labor market and regulatory reform. Copyright Springer Science+Business Media, LLC 2007

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Bibliographic Info

Article provided by Springer in its journal Open Economies Review.

Volume (Year): 18 (2007)
Issue (Month): 3 (July)
Pages: 369-388

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Handle: RePEc:kap:openec:v:18:y:2007:i:3:p:369-388

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Web page: http://www.springerlink.com/link.asp?id=100323

Related research

Keywords: Exchange rates; Monetary policy commitment; Liberalization; Panel data; Political economy of reform; D78; E52; E61;

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Cited by:
  1. Martin Gassebner & Noel Gaston & Michael J. Lamla, 2011. "The Inverse Domino Effect: Are Economic Reforms Contagious?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 52(1), pages 183-200, 02.
  2. Bertola, Giuseppe, 2010. "Fiscal Policy and Labor Markets at Times of Public Debt," CEPR Discussion Papers 8037, C.E.P.R. Discussion Papers.
  3. Ansgar Belke, 2013. "Impact of a Low Interest Rate Environment - Global Liquidity Spillovers and the Search-for-yield," Ruhr Economic Papers 0429, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  4. Bertola, Giuseppe, 2009. "Inequality, Integration, and Policy: Issues and evidence from EMU," CEPR Discussion Papers 7251, C.E.P.R. Discussion Papers.
  5. Giuseppe Bertola, 2008. "Labour Markets in EMU - What has changed and what needs to change," European Economy - Economic Papers 338, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
  6. Belke, Ansgar & Vogel, Lukas, 2012. "Monetary Commitment and Structural Reforms: A Dynamic Panel Analysis for Transition Economies," IZA Discussion Papers 6775, Institute for the Study of Labor (IZA).
  7. Yu-Fu Chen & Gylfi Zoega, 2011. "Floating Exchange Rates as Employment Protection," DEGIT Conference Papers c016_038, DEGIT, Dynamics, Economic Growth, and International Trade.
  8. Ansgar Belke & Bernhard Herz & Lukas Vogel, 2006. "Beyond Trade – Is Reform Effort Affected by the Exchange Rate Regime? A Panel Analysis for the World versus OECD Countries," Economie Internationale, CEPII research center, issue 107, pages 29-58.

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