Currency substitution as an automatic stabilizer

In the presence of frictions, the existing literature shows that currency substitution is detrimental for domestic aggregate stability. This paper singles out the role of currency substitution and shows that diversified currency holdings operate as an automatic stabilizer that mitigates belief-driven cyclical fluctuations in Farmer’s (1997) indeterminate monetary economy. When the foreign inflation rate is lower than the domestic inflation rate, the model’s steady state always displays saddle-path stability. Hence, equilibrium indeterminacy originally present in the domestic country is entirely removed in the presence of diversified currency holdings. When the foreign inflation rate is higher than the domestic inflation rate, then depending on the degrees of currency substitution and relative risk aversion, indeterminacy is either impossible or the requisite level of the foreign inflation rate for indeterminacy is too high to square with data. The stabilizing effect of diversified currency holdings on domestic aggregate stability is robust to whether domestic and foreign currencies display as Edgeworth substitutes or complements, or are additively separable in the household’s preferences.

Urbanisation et mutation de l’habitat traditionnel Dida dans les villes de divo et Lakota (Côte d’Ivoire)

Le phénomène de l’urbanisation rapide et non-planifiée a fortement influencé la culture du peuple Dida dans les villes de Divo et de Lakota. Ces deux villes sont depuis plus d’un siècle l’objet de mutations socio-spatiales. L’une de ces transformations est la modernisation, voire la disparition de l’habitat traditionnel dans les noyaux villageois desdites ville. L’objectif visé par cette étude est d’analyser les différentes mutations de l’habitat traditionnel Dida dans les villes de Divo et de Lakota. La méthodologie adoptée s’est appuyée sur la recherche bibliographique et l’observation directe. En l’absence d’une base de sondage sur les acteurs de ces mutations dans les noyaux villageois, des questionnaires ont été adressés aux chefs de ménage autochtones Dida. Des visites de terrain ont été effectuées dans les différents noyaux villageois des deux villes afin d’identifier et mieux localiser les types d’habitat dans le milieu de vie des Dida. Il ressort des résultats de l’étude, une profonde mutation de l’habitat traditionnel Dida faisant apparaître une diversité d’habitat dans le paysage urbain. Aujourd’hui, le paysage urbain est constitué de 1 % d’habitat traditionnel, 2 % d’habitats coloniaux, 16 % d’habitats traditionnels améliorés, 80 % d’habitats modernes et 1 % d’habitat précaire. Par ailleurs, les résultats indiquent que les mutations de l’habitat traditionnel résultent de la croissance démographique, de l’impact de la colonisation et de l’économie monétaire de la région. The phenomenon of rapid and unplanned urbanisation has strongly influenced the culture of the Dida people in the cities of Divo and Lakota. These two cities have been subject to socio-spatial changes for more than a century. One of these transformations is the modernisation or even the disappearance of the traditional habitat in the village cores of these cities. The aim of this study is to analyse the different changes in the traditional Dida habitat in the towns of Divo and Lakota. The methodology adopted was based on bibliographical research and direct observation. In the absence of a sampling frame on the actors of these mutations in the village nuclei, questionnaires were sent to the heads of Dida indigenous households. Field visits were carried out in the different village centres of the two towns in order to identify and better locate the types of habitat in the Dida's living environment. The results of the study show that there has been a profound change in the traditional Dida habitat, revealing a diversity of habitats in the urban landscape. Today, the urban landscape is made up of 1% traditional habitat, 2% colonial habitat, 16% improved traditional habitat, 80% modern habitat and 1% precarious habitat. Furthermore, the results indicate that the changes in the traditional habitat are the result of population growth, the impact of colonisation and the monetary economy of the region.

GROWTH LIMITS AND EUROPEAN FIDUCIARY MONEY

Тhis paper considers the phenomenon of global growth, emphasizing the slowdown and (limits) of the Western GDP growth. By comparing the United States as the most mature economy in the world, China as the new hegemon, the OECD countries, the BRICS countries, and the rest of the world, we show the growth and unequal development of the five "regional futures" of the global world. In addition to the imminent economic reasons for the backwardness of Western economies and societies, the crisis of the structure and functioning of the democratic capitalist system, and the ecological limits of sustainability, we emphasize two non-economic moments: the end of liberalism as a fundamental ideology of the Western world, and the loss of trust, which is a fundamental moral category. According to futurist forecasts, the West has slowed down, the financial system has been damaged, and the recovery is slow and uncertain. The following subjects are being considered: the growth paradigm, the belief in lasting progress, the end of liberalism and the loss of confidence, the recovery of Western economies, some monetary policy measures, and European fiduciary money and the slowdown of the growth in the Eurozone. The monetary economy of the euro as an agreed single currency has caused strong changes in the Eurozone and has “trapped” the European Union. The euro economy, among other things, is responsible for the sharp division of the Eurozone member states into surplus and deficit countries, and the Eurozone crisis, stagnation, and slowdown in economic (non- economic) growth.

MONETARY REGIMES, MONEY SUPPLY, AND THE USA BUSINESS CYCLE SINCE 1959: IMPLICATIONS FOR MONETARY POLICY TODAY

The monetary authority’s choice of operating procedure has significant implications for the role of monetary aggregates and interest rate policy on the business cycle. Using a dynamic general equilibrium model, we show that the type of endogenous monetary regime, together with the interaction between money supply and demand, does well to capture the actual behavior of a monetary economy—the USA. The results suggest that the evolution toward a stricter interest rate-targeting regime renders central bank balance sheet expansions ineffective. In the context of the 2007–2009 Great Recession, a more flexible interest rate-targeting regime would have led to a significant monetary expansion and more rapid economic recovery in the USA.

The Illusions of Inflation Targeting, With an Application to Ukraine

This article reviews the analytical justification, the theoretical content, and the practical experience of inflation targeting, which has become the standard framework for monetary policy. It shows that due to the inflation-targeting literature’s neglect for the money demand as part of the monetary relation that drives price determination, it provides a distorted theoretical account of the most basic relations in a monetary economy and an illusionary vision of what a modern central bank could achieve. The last section of the article uses the recent monetary history of Ukraine to illustrate the pitfalls and illusions of inflation targeting.