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Die Hypothese konterkarierender Kapitalströme
Eine Fallstudie für die Bundesrepublik Deutschland
Credit and Capital Markets – Kredit und Kapital, Vol. 8 (1975), Iss. 1 : pp. 1–30
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Pentti J. K. Kouri, Cambridge/Mass.
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Ein Vierteljahres-Modell des Geld- und Kreditsektors �sterreichs
Gl�ck, Heinz
Empirica, Vol. 6 (1979), Iss. 2 P.163
https://doi.org/10.1007/BF00926544 [Citations: 1]
References
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Abstract
The Hypothesis of Mutually Countervailing Capital Flows
Starting out from a monetary theory of the balance of payments, the contribution analyses the interrelationship of monetary policy and capital movements for the Federal Republic of Germany. It shows what possibilities exist in an open economy with liberalized capital movements and fixed exchange rates to pursue an autonomous monetary policy and what the consequences of such a policy are. The basis of the empirical analysis is an econometric model which, under the hypothesis of high capital mobility, proceeds from the assumption that capital movements into and out of the Federal Republic and the domestic interest level are dependent on the stock of wealth andincome at home and abroad, the interest level abroad, exchange rate expectations, changes in the net domestic accounts receivable of the central bank and the balance on current account. These two estimating equations - the capital movements equation and the interest equation - show that in open economies with fixed exchange rates short-term equilibrium of the finance markets is established via adjustments of the domestic interest rate and by inflows and outflows of foreign capital. If capital mobility is high, where exchange rates are fixed the adjustment is effected for the most part via capital movements. The estimates obtained with the capital movement and interest equations demonstrate clearly that monetary policy measures in the Federal Republic are counteracted to a considerable extent by capital inflows from abroad. However, since the regression coefficient for these mutually countervailing effects is significantly smaller than one, in principle it is possible for the Bundesbank to control the supply of money, if it neutralizes the effects of balance-of-payments surpluses or deficits. This, in turn, makes it clear that the necessity for intervention on the foreign exchange market results not so inuch from disequilibria in foreign trade as from the attempt to pursue an autonomous monetary policy and the necessity of neutralizing disturbances of the capital account. Autonomous monetary policy, freedom of capital flows and fixed exchange rates can be reconciled with each other - as the study shows - only with great difficulty, if at all.