Ira Kaminow - Academia.edu (original) (raw)
Papers by Ira Kaminow
Journal of Finance, Dec 1, 1973
THE IDEA of selective credit controls periodically captures the minds of public policymakers and ... more THE IDEA of selective credit controls periodically captures the minds of public policymakers and even, from time to time, of economists. The most recent manifestation of this interest has resulted from the disproportionate effect of tight credit markets on housing, and, to a lesser extent, state and local governments. Typically, policymakers and other "men of affairs" show greater interest in the issue of selective credit controls than members of the academic community.1 While some economists would debate whether policymakers should intervene in allocations as determined in the market (for example, [5] ), there has been little systematic investigation of the general problem of selective credit controls or the ones specifically at issue. This paper is an attempt to set up a theoretical framework in which the effectiveness of selective credit policies may be examined. Seeing a need to redistribute the burden of adjustment caused by tight monetary policy, Andrew Brimmer of the Federal Reserve Board of Governors suggested the imposition of supplemental reserves on the assets of banks. The basic idea underlying the proposal is that by levying different reserve requirements on different kinds of assets held by financial intermediaries, the monetary authority might influence the sectoral composition of real investment in the economy. Two major criticisms have been leveled against the proposal to use selective monetary policies. (a) Credit is "fungible" and it is therefore likely that selective controls will notinfluence the allocation of real investment in the way anticipated by policymakers. "The ability of borrowers to switch channels from one credit source to another and the difficulty of determining borrower purpose on the basis of the particular channel or borrowing instrument employed make control of use far more uncertain than control of channel and instrument" [4].
The Journal of Finance, 1973
THE IDEA of selective credit controls periodically captures the minds of public policymakers and ... more THE IDEA of selective credit controls periodically captures the minds of public policymakers and even, from time to time, of economists. The most recent manifestation of this interest has resulted from the disproportionate effect of tight credit markets on housing, and, to a lesser extent, state and local governments. Typically, policymakers and other "men of affairs" show greater interest in the issue of selective credit controls than members of the academic community.1 While some economists would debate whether policymakers should intervene in allocations as determined in the market (for example, [5] ), there has been little systematic investigation of the general problem of selective credit controls or the ones specifically at issue. This paper is an attempt to set up a theoretical framework in which the effectiveness of selective credit policies may be examined. Seeing a need to redistribute the burden of adjustment caused by tight monetary policy, Andrew Brimmer of the Federal Reserve Board of Governors suggested the imposition of supplemental reserves on the assets of banks. The basic idea underlying the proposal is that by levying different reserve requirements on different kinds of assets held by financial intermediaries, the monetary authority might influence the sectoral composition of real investment in the economy. Two major criticisms have been leveled against the proposal to use selective monetary policies. (a) Credit is "fungible" and it is therefore likely that selective controls will notinfluence the allocation of real investment in the way anticipated by policymakers. "The ability of borrowers to switch channels from one credit source to another and the difficulty of determining borrower purpose on the basis of the particular channel or borrowing instrument employed make control of use far more uncertain than control of channel and instrument" [4].
IN 1952, William Baumol showed how inventory theoretic techniques could be applied to the analysi... more IN 1952, William Baumol showed how inventory theoretic techniques could be applied to the analysis of the demand for money.' This application has considerable intuitive appeal since inventories and money balances have a great deal in common. Inventories are kept on hand to bridge the gap between purchase and sale, money to bridge the gap between receipts and expenditures. Where optimal inventories depend on expectations regarding future demand, optimal cash balances depend on expectations regarding cash outflows. Like the holders of inventories, holders of money are faced with the conflict of making frequent small acquisitions2 or less frequent, larger acquisitions. In both cases the relevant economic unit can be thought to follow the same sort of calculus to resolve the conflict. On the one hand, fixed costs per acquisition and the danger of being "caught short" tend to produce large stocks of money and inventories. On the other, the opportunity to earn a direct return on alternative assets works to reduce these stocks. In both cases, equality of the competing costs at the margin is sought. These analogies are by no means universally acknowledged. Whether they are valid is, of course, an empirical question. To date, the data have not been shown to be consistent with the hypothesis. The main source of difficulty seems to be the short term interest rate. Since the inventory approach stresses the return to alternative assets, it predicts a significant (inverse) relation between money balances and the short-term interest rate. On the basis of economywide data, the empirical evidence of such a relation is, at best, mixed.3 Briefly, we can summarize the evidence as follows: For data limited to the predepression years, the short-term interest rate has consistently been found statistically insignificant.4 Tests that include annual data from the depression and postdepression years have revealed fairly strong covariation between movements
Journal of Monetary Economics, 1977
The Journal of Finance, 1969
IN 1952, William Baumol showed how inventory theoretic techniques could be applied to the analysi... more IN 1952, William Baumol showed how inventory theoretic techniques could be applied to the analysis of the demand for money.' This application has considerable intuitive appeal since inventories and money balances have a great deal in common. Inventories are kept on hand to bridge the gap between purchase and sale, money to bridge the gap between receipts and expenditures. Where optimal inventories depend on expectations regarding future demand, optimal cash balances depend on expectations regarding cash outflows. Like the holders of inventories, holders of money are faced with the conflict of making frequent small acquisitions2 or less frequent, larger acquisitions. In both cases the relevant economic unit can be thought to follow the same sort of calculus to resolve the conflict. On the one hand, fixed costs per acquisition and the danger of being "caught short" tend to produce large stocks of money and inventories. On the other, the opportunity to earn a direct return on alternative assets works to reduce these stocks. In both cases, equality of the competing costs at the margin is sought. These analogies are by no means universally acknowledged. Whether they are valid is, of course, an empirical question. To date, the data have not been shown to be consistent with the hypothesis. The main source of difficulty seems to be the short term interest rate. Since the inventory approach stresses the return to alternative assets, it predicts a significant (inverse) relation between money balances and the short-term interest rate. On the basis of economywide data, the empirical evidence of such a relation is, at best, mixed.3 Briefly, we can summarize the evidence as follows: For data limited to the predepression years, the short-term interest rate has consistently been found statistically insignificant.4 Tests that include annual data from the depression and postdepression years have revealed fairly strong covariation between movements
The Journal of Finance, 1977
Journal of International Economics, 1979
Abstract This paper analytically compares macroeconomic performance under fixed and flexible exch... more Abstract This paper analytically compares macroeconomic performance under fixed and flexible exchange-rate regimes. A model is developed in which the economy is stable around full employment, but subject to periodic random shocks. From the model, conditions are derived which allow comparison (across exchange-rate regimes) of the size of the expected squared deviation from full employment income in any arbitrarily selected period. These conditions are stated in terms of the variances and elasticities of particular behavioral relations.
Journal of Finance, Dec 1, 1973
THE IDEA of selective credit controls periodically captures the minds of public policymakers and ... more THE IDEA of selective credit controls periodically captures the minds of public policymakers and even, from time to time, of economists. The most recent manifestation of this interest has resulted from the disproportionate effect of tight credit markets on housing, and, to a lesser extent, state and local governments. Typically, policymakers and other "men of affairs" show greater interest in the issue of selective credit controls than members of the academic community.1 While some economists would debate whether policymakers should intervene in allocations as determined in the market (for example, [5] ), there has been little systematic investigation of the general problem of selective credit controls or the ones specifically at issue. This paper is an attempt to set up a theoretical framework in which the effectiveness of selective credit policies may be examined. Seeing a need to redistribute the burden of adjustment caused by tight monetary policy, Andrew Brimmer of the Federal Reserve Board of Governors suggested the imposition of supplemental reserves on the assets of banks. The basic idea underlying the proposal is that by levying different reserve requirements on different kinds of assets held by financial intermediaries, the monetary authority might influence the sectoral composition of real investment in the economy. Two major criticisms have been leveled against the proposal to use selective monetary policies. (a) Credit is "fungible" and it is therefore likely that selective controls will notinfluence the allocation of real investment in the way anticipated by policymakers. "The ability of borrowers to switch channels from one credit source to another and the difficulty of determining borrower purpose on the basis of the particular channel or borrowing instrument employed make control of use far more uncertain than control of channel and instrument" [4].
The Journal of Finance, 1973
THE IDEA of selective credit controls periodically captures the minds of public policymakers and ... more THE IDEA of selective credit controls periodically captures the minds of public policymakers and even, from time to time, of economists. The most recent manifestation of this interest has resulted from the disproportionate effect of tight credit markets on housing, and, to a lesser extent, state and local governments. Typically, policymakers and other "men of affairs" show greater interest in the issue of selective credit controls than members of the academic community.1 While some economists would debate whether policymakers should intervene in allocations as determined in the market (for example, [5] ), there has been little systematic investigation of the general problem of selective credit controls or the ones specifically at issue. This paper is an attempt to set up a theoretical framework in which the effectiveness of selective credit policies may be examined. Seeing a need to redistribute the burden of adjustment caused by tight monetary policy, Andrew Brimmer of the Federal Reserve Board of Governors suggested the imposition of supplemental reserves on the assets of banks. The basic idea underlying the proposal is that by levying different reserve requirements on different kinds of assets held by financial intermediaries, the monetary authority might influence the sectoral composition of real investment in the economy. Two major criticisms have been leveled against the proposal to use selective monetary policies. (a) Credit is "fungible" and it is therefore likely that selective controls will notinfluence the allocation of real investment in the way anticipated by policymakers. "The ability of borrowers to switch channels from one credit source to another and the difficulty of determining borrower purpose on the basis of the particular channel or borrowing instrument employed make control of use far more uncertain than control of channel and instrument" [4].
IN 1952, William Baumol showed how inventory theoretic techniques could be applied to the analysi... more IN 1952, William Baumol showed how inventory theoretic techniques could be applied to the analysis of the demand for money.' This application has considerable intuitive appeal since inventories and money balances have a great deal in common. Inventories are kept on hand to bridge the gap between purchase and sale, money to bridge the gap between receipts and expenditures. Where optimal inventories depend on expectations regarding future demand, optimal cash balances depend on expectations regarding cash outflows. Like the holders of inventories, holders of money are faced with the conflict of making frequent small acquisitions2 or less frequent, larger acquisitions. In both cases the relevant economic unit can be thought to follow the same sort of calculus to resolve the conflict. On the one hand, fixed costs per acquisition and the danger of being "caught short" tend to produce large stocks of money and inventories. On the other, the opportunity to earn a direct return on alternative assets works to reduce these stocks. In both cases, equality of the competing costs at the margin is sought. These analogies are by no means universally acknowledged. Whether they are valid is, of course, an empirical question. To date, the data have not been shown to be consistent with the hypothesis. The main source of difficulty seems to be the short term interest rate. Since the inventory approach stresses the return to alternative assets, it predicts a significant (inverse) relation between money balances and the short-term interest rate. On the basis of economywide data, the empirical evidence of such a relation is, at best, mixed.3 Briefly, we can summarize the evidence as follows: For data limited to the predepression years, the short-term interest rate has consistently been found statistically insignificant.4 Tests that include annual data from the depression and postdepression years have revealed fairly strong covariation between movements
Journal of Monetary Economics, 1977
The Journal of Finance, 1969
IN 1952, William Baumol showed how inventory theoretic techniques could be applied to the analysi... more IN 1952, William Baumol showed how inventory theoretic techniques could be applied to the analysis of the demand for money.' This application has considerable intuitive appeal since inventories and money balances have a great deal in common. Inventories are kept on hand to bridge the gap between purchase and sale, money to bridge the gap between receipts and expenditures. Where optimal inventories depend on expectations regarding future demand, optimal cash balances depend on expectations regarding cash outflows. Like the holders of inventories, holders of money are faced with the conflict of making frequent small acquisitions2 or less frequent, larger acquisitions. In both cases the relevant economic unit can be thought to follow the same sort of calculus to resolve the conflict. On the one hand, fixed costs per acquisition and the danger of being "caught short" tend to produce large stocks of money and inventories. On the other, the opportunity to earn a direct return on alternative assets works to reduce these stocks. In both cases, equality of the competing costs at the margin is sought. These analogies are by no means universally acknowledged. Whether they are valid is, of course, an empirical question. To date, the data have not been shown to be consistent with the hypothesis. The main source of difficulty seems to be the short term interest rate. Since the inventory approach stresses the return to alternative assets, it predicts a significant (inverse) relation between money balances and the short-term interest rate. On the basis of economywide data, the empirical evidence of such a relation is, at best, mixed.3 Briefly, we can summarize the evidence as follows: For data limited to the predepression years, the short-term interest rate has consistently been found statistically insignificant.4 Tests that include annual data from the depression and postdepression years have revealed fairly strong covariation between movements
The Journal of Finance, 1977
Journal of International Economics, 1979
Abstract This paper analytically compares macroeconomic performance under fixed and flexible exch... more Abstract This paper analytically compares macroeconomic performance under fixed and flexible exchange-rate regimes. A model is developed in which the economy is stable around full employment, but subject to periodic random shocks. From the model, conditions are derived which allow comparison (across exchange-rate regimes) of the size of the expected squared deviation from full employment income in any arbitrarily selected period. These conditions are stated in terms of the variances and elasticities of particular behavioral relations.