Publicaciones

This paper offers some thoughts on the relationship between asset price developments, the conduct of monetary policy and the role of financial regulation, in a low inflation environment. It also reviews some recent episodes of financial stress and the experience of asset inflation in the Spanish housing market. A number of policy lessons are drawn with special attention to the European Monetary Union.

El objetivo de este trabajo es analizar los incentivos fiscales a la adquisición de viviendas en España, mediante la construcción de una medida de la cuña fiscal sobre el coste de uso, para el período 1986-2004, a partir de un conjunto amplio de casos particulares. Los resultados confirman la existencia de una subvención neta global, aunque diferente según régimen de tenencia y nivel de renta, y decreciente durante este período como consecuencia, principalmente, de la reducción en los tipos de interés. No parece pues que la fiscalidad haya contribuido de manera determinante a la última fase alcista del precio de la vivienda.

En este trabajo se analizan los principales rasgos de la larga fase de expansión de la economía española, en relación con los retos y oportunidades que se han derivado de la entrada en la UEM. Se parte de las condiciones en las que se abordó la estrategia de la convergencia y de las alternativas de política económica entonces existentes, que se expresaron en el debate sobre la conveniencia de la entrada en el euro. Se ponen de manifiesto los principales factores que han actuado como motores del dinamismo económico y los riesgos que han ido surgiendo como consecuencia del peculiar patrón de crecimiento seguido. Se trata de riesgos relacionados con la competitividad y el endeudamiento excesivo, que aunque no suponen impedimentos para el mantenimiento de la expansión a corto plazo, su análisis resulta fundamental para identificar las claves de la proyección hacia el futuro de una senda de crecimiento económico elevado.

The objective of this paper is to explore the size and normative implications of macroeconomic discrepancies between EMU countries. Available data and empirical work show that EMU countries display noticeable heterogeneity in terms of economic development, exposure to shocks and adjustment mechanisms. But this does not seem to prevent a relatively high degree of similarity in their cyclical patterns. And the remaining discrepancies do not seem much influenced by monetary and exchange rate policies. Indeed, EMU makes a limited difference in terms of the cross country effects of common shocks. It may nevertheless have an influence on the ability of countries to absorb idiosyncratic shocks. The problem is therefore not a deficit of homogeneity so much as a possible deficit of flexibility for each economy to adjust smoothly to country specific developments.

This note investigates whether industry specific characteristics are important determinants of the demand and supply of exports in the euro area, the United Kingdom and the United States. It has two parts: (i) an analysis of the dataset and a discussion of the differences across countries and industries; and (ii) the econometric estimation of the long run elasticities obtained from a supply and demand model for each industry, using an error correction model with quarterly data since 1991. Export volume growth since the early 1990s is found to have been higher in the euro area than the United Kingdom and the United States for most industries, with the exception –particularly in the United Kingdom– of those industries classified as high technology. Export price inflation in domestic currency in high technology industries has remained low over the period in all three regions, while it has increased in low and medium technology industries. The dataset also suggests that the slowing pattern of world trade seen over 2001 is due exclusively to reduced trade in "Office Machinery and Computers" and other "Information and Communication Technology" (ICT) industries. World export markets have moved in a similar manner in all three areas, although the United Kingdom's export market has not grown as quickly as that of either the United States or euro area. This is because the United Kingdom trades proportionally less with areas such as Eastern Europe and Latin America, which have experienced the strongest import growth over the sample. Export market shares have fallen across industries and countries, especially in low and medium technology sectors. The euro area is the best performing country, reflecting the gain in competitiveness facilitated by the depreciation of the euro, while the United Kingdom and the United States have lost competitiveness in most industries. Overall the econometric results show that on the demand side the industrial composition of a region's exports does not appear to be a major factor behind the price elasticity of exports; at least at our level of disaggregation. In terms of export supply, we find that the elasticity of export prices with respect to domestic costs is lower in the United Kingdom than elsewhere, suggesting that in the United Kingdom export prices are predominantly set using "Local Currency Pricing". In contrast, the United States and, to a lesser extent, the euro area pass through more of the changes in domestic costs onto export prices. This is confirmed by the estimation results across industries for each economic area.

The Chinese banking system, characterized by massive government intervention, poor asset quality and low capitalization, has started a reform process based on three main pillars: (i) bank restructuring, through the cleaning-up of non-performing loans and public capital injections, particularly in the four largest state-owned banks; (ii) financial liberalization, with the gradual flexibilization of quantity and price controls, the opening-up to foreign competition and cautious steps toward capital account liberalization; and (iii) strengthened financial regulation and supervision, coupled with efforts to improve corporate governance and transparency. Although the reform is still ongoing, our preliminary assessment indicates that changes are needed for the reform to be fully successful. Asset quality has improved, particularly in the recapitalized banks, but there is a high risk of a new build-up of non performing loans. Capitalization has increased in the largest banks, as a consequence of the government capital injections, but it generally remains low and profitability has fallen even further. China's huge financing needs, to maintain high economic growth, and its commitment to fully open up its banking system to foreign competition urgently require a more comprehensive and time-bound strategy, with a long-term vision of the desired structure of the Chinese banking system. Bank recapitalization should be completed immediately, not only to ensure bank soundness, but also to increase profitability, which could be affected negatively as competition increases with full financial liberalization. Bank recapitalization, however, needs to be accompanied by a radical improvement in corporate governance, which would clearly be facilitated by a change in the property structure.

This paper deals with the economics of secondary markets for government bonds. Ultimately, the analysis is shaped by a public policy goal: assessing the elements of a regulatory framework for these markets. In that regard, the decisive role of market structure leads to a critical review of microstructure conclusions relevant specifically for government debt markets. It is argued that the nature of information asymmetries and matching costs in government debt markets determines a bias towards a fragmented microstructure at odds both with exchange-like arrangements and with ordinary regulatory approaches. Hence, a generic conclusion highlights the risks of blindly transposing regulatory principles from the equity markets area without due regard to the specifics of the bond market. As a specific application of this idea, the paper critically reviews electronic trading platforms that emulate exchange-like order execution solutions. More specifically, the paper opposes the hybrid microstructure (pure limit order book plus affirmative quoting obligation) faced by European primary dealers and the arbitrage-based approach to market-making found in US inter-dealer markets. The Citigroup disruptive trade in August 2004 is analyzed from this perspective. Government bond regulation is argued to necessarily depart from ordinary approaches also because it captures the diverse interests of various governmental agencies. As an application of this principle, the paper discusses repo and short-selling regulation in government bond markets. The atypical market structure and the multi-agency endeavour around government bond markets raise the chances of regulatory failures. Nevertheless, it is argued that a reliance on competition, integrative infrastructure and basic systemic protections as over-arching principles for regulation is consistent with recommendations from relevant economic theory. Finally, political economy issues arising in implementation of transparency, disclosure or retail investor protection will be addressed in the context of selected="selected" country cases.