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In this paper, we investigate the mechanisms through which import tariffs impact the macroeconomy in two large scale workhorse models used for quantitative policy analysis: a computational general equilibrium (CGE) model (Purdue University GTAP model) and a multi-country dynamic stochastic general equilibrium (DSGE) model (IMF GIMF model). The quantitative effects of an increase in tariffs reflect different mechanisms at work. Like other models in the trade literature, in GTAP higher tariffs generate a loss in terms of output arising from an inefficient reallocation of resources between sectors. In GIMF instead, as in other DSGE models, tariffs act as a disincentive to factor utilization. We show that the two models/channels can be broadly interpreted as capturing the impact of tariffs on different components of a country’s aggregate production function: aggregate productivity (GTAP) and factor supply/utilization (GIMF). We discuss ways to combine the estimates from these two models to provide a more complete assessment of the macro effects of tariffs.

Business and Economics --- Macroeconomics --- International Economics --- Development Planning and Policy: Trade Policy --- Factor Movement --- Foreign Exchange Policy --- General Equilibrium and Disequilibrium: Financial Markets --- Economic & financial crises & disasters --- Economics of specific sectors --- Financial crises --- Economic sectors --- Currency crises --- Informal sector --- Economics

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How does a commodity market adjust to a temporary scarcity shock which causes a shift in the slope of the futures price curve? We find long-run relationships between spot and futures prices, inventories and interest rates, which means that such shocks lead to an adjustment back towards a stable equilibrium. We find evidence that the adjustment is somewhat consistent with well-known theoretical models, such as Pindyck (2001); in other words, spot prices rise and then fall, while inventories are used to absorb the shock. Importantly, the pace and nature of the adjustment depends upon whether inventories were initially high or low, which introduces significant nonlinearities into the adjustment process.

Investments: Energy --- Finance: General --- Investments: Futures --- Macroeconomics --- General Equilibrium and Disequilibrium: Financial Markets --- Pension Funds --- Non-bank Financial Institutions --- Financial Instruments --- Institutional Investors --- General Financial Markets: General (includes Measurement and Data) --- Metals and Metal Products --- Cement --- Glass --- Ceramics --- Finance --- Investment & securities --- Futures --- Commodity markets --- Metals --- Futures markets --- Metal prices --- Derivative securities --- Commodity exchanges --- Prices

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In this paper we examine the channels through which innovations to policy variables— policy rates or monetary aggregates—affect such macroeconomic variables as output and inflation in Sri Lanka. The effectiveness of monetary policy instruments is judged through the prism of conventional policy channels (money/interest rate, bank lending, exchange rate and asset price channels) in VAR models. The timing and magnitude of these effects are assessed using impulse response functions, and through the pass-through coefficients from policy to money market and lending rates. Our results show that (i) the interest rate channel (money view) has the strongest Granger effect (helps predict) on output with a 0.6 percent decrease in output after the second quarter and a cumulative 0.5 percent decline within a three-year period in response to innovations in the policy rate; (ii) the contribution from the bank lending channel is statistically significant (adding 0.2 percentage point to the baseline effect of policy rates) in affecting both output and prices but with a lag of about five quarters for output and longer for prices; and (iii) the exchange rate and asset price channels are ineffective and do not have Granger effects on either output or prices.

Sri Lanka --- Shri Lanka --- Lanka --- Serendib --- Taprobane --- Cellao --- Zeilan --- Serendip --- Sī Langkā --- Sri Lanka Prajathanthrika Samajavadi Janarajaya --- Democratic Socialist Republic of Sri Lanka --- Śrīlaṅkā --- Ilaṅkai --- Ceylon --- Monetary policy. --- Banks and Banking --- Finance: General --- Money and Monetary Policy --- Monetary Policy --- Central Banks and Their Policies --- Open Economy Macroeconomics --- General Equilibrium and Disequilibrium: Financial Markets --- Interest Rates: Determination, Term Structure, and Effects --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- General Financial Markets: General (includes Measurement and Data) --- Banking --- Finance --- Monetary economics --- Central bank policy rate --- Repo rates --- Bank credit --- Deposit rates --- Money markets --- Financial services --- Money --- Financial markets --- Interest rates --- Credit --- Money market

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This paper considers the extent of retail banking integration in the Communauté Economique et Monétaire d'Afrique Centrale (CEMAC) and the level of bank competition at the regional level. Using a mix of quantitative and qualitative indicators, the paper finds some evidence of price convergence in average interest rate spreads. However, this observed fact is not supported by an increase in cross-border flows in retail loans and deposits, and price convergence may merely reflect excess liquidity in the region. Other data also indicate that bank competition within the CEMAC as a region is limited, complementing the findings on integration. Addressing shortfalls in legal and regulatory frameworks, infrastructure, and markets would facilitate integration.

International economic relations. --- International finance -- Law and legislation. --- International law. --- Investments, Foreign (International law). --- Finance --- Business & Economics --- Money --- Banks and Banking --- Finance: General --- Industries: Financial Services --- Discrete Regression and Qualitative Choice Models --- Discrete Regressors --- Proportions --- General Equilibrium and Disequilibrium: Financial Markets --- Financial Markets and the Macroeconomy --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Financing Policy --- Financial Risk and Risk Management --- Capital and Ownership Structure --- Value of Firms --- Goodwill --- General Financial Markets: General (includes Measurement and Data) --- Portfolio Choice --- Investment Decisions --- Financial Institutions and Services: Government Policy and Regulation --- Banking --- Commercial banks --- Competition --- Excess liquidity --- Financial markets --- Financial institutions --- Financial integration --- Asset and liability management --- Financial services --- Banks and banking --- Liquidity --- Economics --- International finance --- Financial services industry --- Cameroon

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This paper discusses the challenging question of whether central banks should use treasury bills or central bank bills for draining excess liquidity in the banking system. While recognizing that there are practical reasons for using central bank bills, the paper argues that treasury bills are the first best option especially because positive externalities for the financial sector and the rest of the economy. However, the main considerations in the choice should be: (i) operational independence for the central bank; (ii) market development; and (iii) the strengthening of the transmission of monetary policy impulses.

Liquidity (Economics) --- Treasury bills --- Banks and banking, Central --- Banker's banks --- Banks, Central --- Central banking --- Central banks --- Banks and banking --- Bills, Treasury --- Bills and notes --- T-bills --- Government securities --- Assets, Frozen --- Frozen assets --- Finance --- Econometric models. --- Banks and Banking --- Investments: General --- Public Finance --- Debt --- Debt Management --- Sovereign Debt --- General Equilibrium and Disequilibrium: Financial Markets --- Monetary Policy --- Fiscal and Monetary Policy in Development --- Interest Rates: Determination, Term Structure, and Effects --- Wages, Compensation, and Labor Costs: Public Policy --- General Financial Markets: General (includes Measurement and Data) --- Central Banks and Their Policies --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Investment & securities --- Banking --- Public finance & taxation --- Central bank bills --- Treasury bills and bonds --- Securities --- Financial institutions --- Government debt management --- Public financial management (PFM) --- Financial instruments --- Debts, Public --- Chile