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Poland has joined the European Union and is set to join the European Monetary Union (EMU) in the near future. Euro area membership involves potential costs and benefits. On the one hand, Poland will abolish the zloty/euro exchange rate and, as a result, transaction costs and exchange rate risk within the single currency area will be eliminated. On the other hand, it is argued that a single currency area implies the costs stemming from the sacrifice of autonomous monetary stabilization policy, which allows for an independent interest rate policy, and an exchange rate adjustment mechanism in the presence of country-specific shocks. This dissertation focuses on a quantitative assessment of the economic costs of joining the EMU. The evaluation of the volatility of main macroeconomic variables under the current inflation targeting regime and fixed exchanged rate is performed within an optimizing dynamic general equilibrium model of a small open economy with nominal rigidities. Model dynamics under terms of trade and world interest rate shocks are investigated. We find that the euro adoption implies a higher macroeconomic volatility. Analyzing the impact of terms of trade shock, the inflation targeting regime is more favorable, as an inability to devalue the currency under the euroization scenario leads to a slower recovery in demand for non-tradable goods and thus consumption. Considering the impact of a sudden decline in the world interest rate, an excessive zloty appreciation and the tightening of monetary policy under inflation targeting pushes the economy into a deeper recession compared to the adoption of the euro regime, while long-run implications are almost the same for the two scenarios. / Economics

This dissertation consists of three essays on housing markets and monetary policy. The first essay focuses on the impact of monetary policy on U.S. local housing markets and finds that monetary policy has uneven impacts on local housing markets, and that the magnitude of the impacts are correlated with housing supply regulations. The second essay studies the optimal interest rate rule in a DSGE model with housing market spillovers and finds that the optimal interest rate rule responds to house price inflation even when the stabilization of house price is not among the objectives of the policymaker. The third essay is the core of this dissertation. I construct a dynamic stochastic general equilibrium (DSGE) model in this paper to study the fluctuations in the U.S. housing markets. The model features a market for newly built houses, a secondary market for old houses, and an endogenous term structure of nominal interest rates. Negative technological progress in the housing sector explains the upward trend in house prices over the past four decades. Housing preference and technology innovations explain about 80% of the volatility of housing investment, real price of new houses, and the old-to-new house price ratio. Monetary factors explain about 15% of the volatility of housing investment, but do not significantly contribute to the price fluctuations of either new or old houses. The preference innovation to old houses is the leading determinant of the run-up in the price of old houses relative to the price of new houses during the 10-year period before the Great Recession. The term structure is endogenous in this paper, and the intertemporal preference innovation makes a non-negligible contribution to the variations in nominal interest rates. Housing market conditions do not contribute much to the fluctuations of interest rates, but significantly affect the shape of the yield curve. / Ph. D.

The literature trying to link the increase in unemployment in many western European countries since the middle of the 1970s to an increase in labour market rigidity has run into a number of problems. In particular, changes in labour market institutions do not seem to be able to explain the evolution of unemployment across time. We conclude that a new theory of medium run unemployment swings should explain the increase in unemployment in many European countries and the lack thereof in the United States. Furthermore, it should also help to explain the high degree of endogenous unemployment persistence in the many European countries and findings suggesting a link between disinflationary monetary policy and subsequent increases in the NAIRU. To address these issues, we first develop an endogenous growth sticky price model. We subject the model to an uncorrelated cost push shock, in order to mimic a scenario akin to the one faced by central banks at the end of the 1970s. Monetary policy implements a disinflation by following an interest feedback rule calibrated to an estimate of a Bundesbank reaction function. 40 quarters after the shock has vanished, unemployment is still about 1.8 percentage points above its steady state. The model also partly explains cross country differences in the unemployment evolution by drawing on differences in the size of the disinflation, the monetary policy reaction function and wage setting. We then draw some conclusions about optimal monetary policy in the presence of endogenous growth and find that optimal policy is substantially less hawkish than in an identical economy without endogenous growth. The second model introduces duration dependent skill decay among the unemployed into a New-Keynesian model with hiring frictions developed by Blanchard/Gali (2008). If the central bank responds only to inflation and quarterly skill decay is above a threshold level, determinacy requires a coefficient on inflation smaller than one. The threshold level is plausible with little steady-state hiring and firing ("Continental European Calibration") but implausibly high in the opposite case ("American calibration"). Neither interest rate smoothing nor responding to the output gap helps to restore determinacy if skill decay exceeds the threshold level. However, a modest response to unemployment guarantees determinacy. Moreover, under indeterminacy, both an adverse sunspot shock and an adverse technology shock increase unemployment extremely persistently.

This thesis has a twofold aim. It first argues that monetary policy is inherently political because it involves struggles over meaning. It modifies Niebyl’s (1946) conceptual approach with an explicit attention to meaning, advancing a theory/ policy discourse/institutional practices nexus for exploring central banking. It shows that the emergence of leading representations of monetary processes (in Ricardo, Keynes and Friedman) involved discursive struggles during periods of crisis to assign meaning to problems and establish dominant interpretations. Politics and power were not grafted onto policy but were ontologically constitutive of it, shaping specific institutional configurations and practices. Second, this conceptualization is taken to a case study: a critical scrutiny of the role played by the central bank of Romania (NBR) in the reconstitution of the postcommunist Romanian economy as neoliberal economy from 1990 to 2008. The thesis asks what does the central bank do when the state, defined through its central planning legacy, ‘retreats’ from the market? The usual account explains policy success as direct result of commitments to neoliberal (monetarist) principles prescribed by international policy advice. Before 1997, neocommunist governments politically validated a communist legacy: soft budget constraints in the (state) productive sector. Politicized monetary policy decisions produced repeated crises. Afterwards, neoliberal governments gradually institutionalized an autonomous economic sphere, allowing an objective formulation and implementation of stability-orientated monetarist policies. The thesis challenges this orthodoxy. It argues against the attempts to erase politics from monetary policy processes that the above account articulates. Instead, drawing on critical conceptualizations of neoliberalism in its shifting forms, the period under analysis will be (re)interpreted as an ongoing process of neoliberalization, with the central bank an important actor in it. Indeed, the narration of crises identified the NBR as an essential instrument of institutional change and neoliberal ‘policy-making’. Monetarist narratives (ideologically) legitimized neoliberalism and effectively enacted neoliberal principles of monetary governance in the central bank. Thus, before 1997, the central bank functioned as a key vehicle of the neoliberal attack on the state’s capacity to craft economic reform. Since neoliberal institutions (also) take time to build, expanding policy repertoires outside the monetarist range invested the central bank with increasing powers to respond to structural and institutional resistance to neoliberal logics, arising from both communist legacies and ongoing political struggles. After 1997, the central bank’s rationality gradually changed to a constructive phase, normalizing an extralocal mode of economic governance whose distinguishing features will be identified. Institutional practices reconstructed the relationship between money, foreign exchange and treasury markets, subjugating liquidity management to the requirements of financialized accumulation. With financial stability increasingly tied into transnational actors’ choices, the NBR adopted inflation targeting. Nevertheless, inflation-targeting’s promise of stability operated to sideline the destabilizing nature of normalized neoliberal practices of monetary management, clearly evoked by the 2008 crisis. The thesis concludes with policy implications and an agenda for future research.

by Kwong Tung Choi. / Bibliography : leaves 127-132 / Thesis (M.Phil.)--Chinese University of Hong Kong, 1982

by Cheung Sin-ching, Suzanne, Wu Bin, Willliam. / Thesis (M.B.A.)--Chinese University of Hong Kong, 1994. / Includes bibliographical references (leaves 96-99). / ACKNOWLEDGMENT --- p.ii / ABSTRACT --- p.iii / TABLE OP CONTENTS --- p.v / LIST OF TABLES --- p.viii / LIST OP EXHIBITS --- p.ix / CHAPTER / Chapter I. --- INTRODUCTION --- p.1 / Background Information --- p.1 / Fixed Rate System --- p.1 / Pegged Rate System --- p.1 / Re-arrangement of RMB Exchange Rate --- p.2 / Repeated Realignments of the Official Rate / Multi-Rate System --- p.3 / Managed Floating Rate System --- p.4 / Purposes of Study --- p.4 / Statements of Problems --- p.4 / Scope of the Problem --- p.5 / Plan of the Report --- p.6 / Chapter II. --- LITERATURE REVIEM --- p.7 / Chapter III. --- RESEARCH METHODOLOGY --- p.11 / Secondary Source Data Collection --- p.11 / Primary Source Data Collection --- p.12 / Strengths and Weaknesses of the Methodology --- p.12 / Chapter IV. --- THE ARRANGEMENT OF THE RMB EXCHANGE RATE --- p.13 / The categorization of Exchange Rate System --- p.13 / The Selection of RMB Exchange Rate system --- p.15 / Pre-Reform Era . . ´ب --- p.15 / Post-Reform Era --- p.17 / The Alteration of Official Rate --- p.17 / The Multi-Rate System --- p.19 / Internal Settlement Rate --- p.19 / Swap Rate --- p.22 / Pros and Cons of Multi-Rate System --- p.24 / Termination of Multi-Rate System --- p.26 / The Determination of RMB Exchange Rate --- p.27 / Chapter V. --- RMB DEVALUATION --- p.30 / Reasons for Devaluation --- p.30 / General Background t The Overvaluation of RMB --- p.30 / Export Promotion --- p.31 / Inflation and Loss of RMB Purchasing Power --- p.32 / Import Surge and Foreign Trade Deficit --- p.33 / Speculative and Psychological Factors --- p.34 / Unification of Dual Rate System --- p.35 / Impacts of RMB Devaluation --- p.35 / External Economy --- p.35 / Merchandise Trade Account --- p.36 / Effects on Export --- p.36 / Effects on Import --- p.39 / Effects on Foreign Trade Balance --- p.39 / Other Considerations --- p.40 / Time Lags --- p.40 / The Fragmentation in China's Foreign Trade Industry --- p.41 / Non-Trade current Account --- p.42 / Tourism --- p.42 / Othet Items in Non-Trade Account --- p.43 / Capital Account --- p.43 / Other Countries' Response --- p.45 / Internal Economy --- p.46 / Imported Inflation --- p.46 / Import Substitution Industry --- p.47 / People's Faith in RMB --- p.47 / Practical Implications of RMB Devaluation: Strategies for Hedging against RMB Risk --- p.48 / Agreement with Chinese Side --- p.49 / Forex-Guaranteed Loan --- p.49 / Diversification of Business --- p.50 / Forex Future Market --- p.50 / Chapter VI. --- PROSPECT OF THE RMB EXCHANGE RATE --- p.52 / Expectation of RMB Exchange Rate: A Move in the Near Future --- p.52 / Forex Demand vs. Forex Supply --- p.53 / Inflation --- p.53 / Free Convertibility of RMB --- p.54 / Definition --- p.54 / Internal Convertibility --- p.55 / External Convertibility --- p.55 / Pros and Cons of RMB Convertibility --- p.56 / Prerequisites to RMB Free Convertibility --- p.57 / Rational Exchange Rate --- p.57 / Sufficient International Settlement Means --- p.57 / Sound Macroeconomic Policies --- p.58 / Efficient Microeconomic Environment --- p.58 / procedures for RMB Free Convertibility --- p.60 / Eliminating the Dual Rate System --- p.60 / Realizing the Limited Convertibility of RMB --- p.60 / Establishing Foreign Exchange Market --- p.62 / Eliminating the FECs --- p.63 / Allowing Free Transfer of Foreign Exchange in Capital Account --- p.63 / Chapter VII. --- CONCLUSIONS AND RECOMMENDATIONS --- p.65 / Conclusions --- p.65 / A Rational Managed-Floating Rate System is in Need --- p.65 / Devaluation is not a Panacea --- p.67 / The RMB Rate is Bearish in Near Future --- p.68 / Free Convertibility is a Long Way to Go --- p.68 / Other Things to Do --- p.69 / Recommendations --- p.69 / Controlling Inflation --- p.69 / Rebalancing Trade Deficit --- p.70 / Restructuring Foreign Trade Industry --- p.70 / Improving the Chinese Enterprises' Efficiency --- p.70 / TABLES --- p.72 / EXHIBITS --- p.83 / BIBLIOGRAPHY --- p.96

Ch. 1. Factor-augmented VAR analysis of the monetary policy in China -- Ch. 2. The time-varying volatillity of Chinese macroeconomic fluctuations. / Leung, Pak Ho. / Thesis (M.Phil.)--Chinese University of Hong Kong, 2010. / Includes bibliographical references. / Abstracts in English and Chinese. / COVER PAGE --- p.1 / ACKNOWLEDGEMENT --- p.2 / TABLE OF CONTENTS --- p.4 / LIST OF FIGURES AND TABLES --- p.6 / ABSTRACT OF CHAPTER I --- p.9 / Chapter 1. --- INTRODUCTION --- p.11 / Chapter 2. --- FEATURES OF POST-CRISIS CHINESE MONETARY POLICY --- p.13 / Chapter 2.1. --- LIBERALIZATION OF CHINA'S MONETARY POLICY IN RECENT YEARS --- p.14 / Chapter 2.2. --- MONETARY POLICY INSTRUMENTS AND TRANSMISSION MECHANISMS --- p.14 / Chapter 2.3. --- EXCHANGE RATE REFORM AND MONETARY POLICY --- p.17 / Chapter 2.4. --- EFFECTS OF MONETARY POLICY ON INDUSTRIAL PRODUCTION AND INFLATION --- p.18 / Chapter 3. --- METHODOLOGY --- p.20 / Chapter 4. --- DATA DESCRIPTION --- p.22 / Chapter 5. --- EMPIRICAL RESULTS --- p.23 / Chapter 5.1 . --- ESTIMATION OF FAVAR WITH REPO RATE AS INSTRUMENT --- p.24 / Chapter 5.2. --- ESTIMATION OF FAVAR WITH BENCHMARK RATE AS INSTRUMENT --- p.25 / Chapter 5.3. --- ESTIMATION OF FAVAR WITH MONETARY FACTOR AS INSTRUMENT --- p.26 / Chapter 5.4. --- ESTIMATION OF FAVAR WITH TOTAL LOAN AS INSTRUMENT --- p.27 / Chapter 5.5. --- ESTIMATION OF FAVAR WITH M2 AS INSTRUMENT --- p.28 / Chapter 5.6. --- POLICY DISCUSSION --- p.29 / Chapter 6. --- CONCLUSIO N --- p.31 / Chapter 7. --- REFERENCE S --- p.32 / Chapter 8. --- APPENDIX --- p.36 / ABSTRACT OF CHAPTER II --- p.60 / Chapter 1. --- INTRODUCTION --- p.62 / Chapter 2. --- OVERVIEW OF CHINESE ECONOMIC PERFORMANCE --- p.64 / Chapter 2.1. --- VOLATILITY OF THE CHINESE MACROECONOMY --- p.64 / Chapter 2.2. --- TESTS OF PARAMETER STABILITY --- p.66 / Chapter 2.2. --- HYPOTHESIS OF ECONOMIC MODERATION --- p.67 / Chapter 3. --- FREQUENCY DOMAIN ANALYSIS --- p.69 / Chapter 3.1 --- ESTIMATION FRAMEWORK --- p.70 / Chapter 3.2. --- ESTIMATION RESULTS --- p.72 / Chapter 4. --- VECTOR AUTOREGRESSION ANALYSIS --- p.75 / Chapter 4.1 --- ESTIMATION RESULTS --- p.70 / Chapter 5. --- CONCLUSION --- p.78 / Chapter 6. --- REFERENCES --- p.80 / Chapter 7. --- APPENDIX --- p.84

Thesis (Ph. D.)--University of Texas at Austin, 2002. / Vita. Includes bibliographical references. Available also from UMI Company.