Andrew Hughes Hallett - Academia.edu (original) (raw)

Papers by Andrew Hughes Hallett

Economic and Social Review, Jan 1, 2002

Computational Economics, Jan 1, 2004

International Journal of Finance & …, Jan 1, 2006

The identification of an European business cycle has been inconclusive. Yet cyclical convergence ... more The identification of an European business cycle has been inconclusive. Yet cyclical convergence is the key consideration for those countries that wish to be members of the currency union (eg UK). In general, countries will vary in the components and characteristics that make up ...

Economics of Transition, Jan 1, 2006

Economic Modelling, Jan 1, 2004

International Economics and Economic …, Jan 1, 2008

ABSTRACT The international financial crisis manifests itself in Ireland not only as a crisis of t... more ABSTRACT The international financial crisis manifests itself in Ireland not only as a crisis of the banking system, but also as a major fiscal crisis, aggravated by years of soft revenue policy and a housing bubble that has burst spectacularly. The severe drop in economic output results in a crisis of employment and a definitive end to the ‘Celtic Tiger’ era of rapid growth and nearfull employment. Although the political system has proven resilient thus far, with membership of the Euro preventing the catastrophic political crises that affected Latvia and Iceland, for example, the crisis has revealed significant weaknesses in political system. This paper considers institutional shortcomings in three arenas through which policies to deal with the crisis must be managed: the parliamentary system, the public administration, and social partnership structures.

Journal of Economic Dynamics and Control, 1998

Recent literature has emphasised how asymmetries in the relationship between inflation and unempl... more Recent literature has emphasised how asymmetries in the relationship between inflation and unemployment make it more difficult to stabilise prices or reach 'full' employment. The same problem arises in Europe due to large disparities in the rates of unemployment, this time because of the integration of product markets coupled with imperfect factor mobility. Are these unemployment disparities due to an inappropriate choice of policies, or to structural differences in market 'fundamentals'? We show that it is the latter which imposes the bulk of the inefficiencies in Europe and that during the 'new EMS period, the European economies were characterised by a centering tendency in labour costs. But a two-speed regime has emerged since 1991. 0 1998 Elsevier Science B.V. All rights reserved.

This paper examines whether Europe's monetary union framework of "ins" and "outs" reflects differ... more This paper examines whether Europe's monetary union framework of "ins" and "outs" reflects differences in market structures underpinned by relatively immobile labour. Such a situation could give rise to sufficient nominal convergence to satisfy the entry requirements to EMU, but little real convergence and hence a significant incentive for some to stay outside. Using models of wage leadership vs. locational competition, we examine the extent and strength of integration in labour market costs using a sample of data covering the 1980s and 1990s -i.e. for the run up to EMU. This exposes a conflict between real and nominal convergence which is ultimately incompatible with further integration. As a result wage bargainers now appear to focus more on their own domestic market conditions. That may deliver a better economic performance, but little extra integration. JEL Classification: F15, F42, J60

The International Centre for …, Jan 1, 1998

Contributed Paper, Jan 1, 2000

Conventional wisdom among policy makers suggests that increasing price or exchange rate variabili... more Conventional wisdom among policy makers suggests that increasing price or exchange rate variability would depress investment. Using the Dixit-Pindyck option value model, this paper argues that exchange rate variations should be split into their misalignments and prove volatility components. We can then show theoretically that there are cases where an undervaluation will increase investment expenditures, and that there are cases where those expenditures would be reduced. Similarly overvaluations may increase or decrease investment depending on certain conditions which will be industry (or economy) specific. However the important general results are: i) the persistence of a misalignment matters; ii) not allowing for separate volatility and misalignment effects results in misspecification; iii) misalignment effects may be asymmetric, in that they may differ depending on their sign; and iv) their impacts are nonlinear. This provides some communality, but beyond that misalignments/volatility have different effects in different places, depending on the industry or industrial structure. We show this on a sample of data from 4 leading OECD economies in terms of the relevant elasticities.

Economics Letters, Jan 1, 2002

... Vinals and Jimeno, 1998 J. Vinals and J. Jimeno, Monetary union and European unemployment, J.... more ... Vinals and Jimeno, 1998 J. Vinals and J. Jimeno, Monetary union and European unemployment, J. Frieden, D. Gros, E. Jones, Editors , The New Political Economy of EMU, Rowman and Littlefield (Governance in Europe Series), Denver, CO (1998). ...

Empirica, Jan 1, 1999

The theory of optimal currency areas states that a single currency zone should have symmetry of s... more The theory of optimal currency areas states that a single currency zone should have symmetry of shocks and structures across regions. Research on monetary union in Europe has either assumed these conditions to hold close enough not to cause problems, or has focussed on asymmetries in shocks. But what if economic structures and/or market responses differ between countries or regions? This paper examines the consequences of a single monetary policy when there are asymmetries in i) the monetary transmissions; ii) the wage/price transmissions; and iii) private sector asset holdings. We find the first and last destabilise the business cycle, and put countries out of phase with one another in a way that cannot be corrected by deficit constrained fiscal policies. The effect is to delay convergence.

International Review of Applied …, Jan 1, 2002

The theory of optimal currency areas stresses that a single currency zone should have symmetry ac... more The theory of optimal currency areas stresses that a single currency zone should have symmetry across shocks and structures. What happens if the monetary transmission mechanisms differ so that a common monetary policy has different effects in different ...

The Economic …, Jan 1, 1999

Conventional wisdom has it that increasing price or exchange rate uncertainty will depress invest... more Conventional wisdom has it that increasing price or exchange rate uncertainty will depress investment. Using the Dixit±Pindyck model, we ®nd that there are situations where this will happen; and situations where it does not. There are threshold effects which allows us to identify when rising volatility would increase or decrease investment; and also to identify which types of industries would gain, and which would suffer, from a move to ®xed exchange rates. This is important for monetary union in Europe since it is likely that, even if trade is insensitive to exchange rate volatility, investment with its longer horizon will be affected.

Empirica, Jan 1, 2004

There is a presumption in the literature that price or exchange rate uncertainty, or uncertainty ... more There is a presumption in the literature that price or exchange rate uncertainty, or uncertainty in the monetary conditions underlying them, will have a negative effect on investment. Some argue that this negative effect will be extended by imperfect competition. However, models of ''irreversible'' investment show that the situation is more complicated than that. In these models, investment expenditures are affected by the scrapping price available on world markets and also by the opportunity cost of waiting rather than investing. The impact of uncertainty is therefore going to depend on the type of industry and hence on the industrial structure of the economy concerned. In addition, it may depend on the persistence of any price ''misalignments'' away from competitive equilibrium. In this paper, we put these theoretical predictions to the test. We estimate investment equations for 13 different industries using data for nine OECD countries over the period 1970-2000. We find that the impact of price uncertainty is negative or insignificant in all but one case whereas the impact of (nominal) exchange rate uncertainty is negative in only six cases, positive in four cases, and insignificant in three others. In addition, there are conflicting effects from the real exchange rate. The net effect depends on whether the source of the uncertainty is in domestic markets or in foreign markets.

International Journal of Finance & Economics, 1997

This paper makes a quantitative assessment of the impact of sterling's exit from the exchange rat... more This paper makes a quantitative assessment of the impact of sterling's exit from the exchange rate mechanism (ERM) in September 1992, taking as given other events and other countries' policies as they happened. To do this we use two different econometric models, each with its own information set. One is a UK model using current (to 1995) information; the other a multicountry model with information as known in early 1992. We therefore examine the question with the bene®t of hindsight and as the policy makers could have seen it at the time. The results are the same. Sterling's exit produced a period of recovery, real growth and little extra in¯ationary pressure.