Current account solvency and the Feldstein-Horioka puzzle

Article Abstract:

The high cross-section of investments and savings share in GDP during high capital mobility is explained by using an econometric model which disregards endogenous government policy. The model considers solvency constraints between savings-investments behavior and current account. It indicates that current accounts are stationary which suggests an independence of savings and investments from capital mobility. The result can explain the Feldstein-Horioka puzzle which relates high association of investment and savings to high capital mobility.

Investments, Gross domestic product, Savings, Organization for Economic Cooperation and Development, Capital movements

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The arms trade and arms control

Article Abstract:

An arms trade model is developed to define the interaction between economic and security factors for the controlling regime. It is shown that decisions of the controlling regime have the capacity to generate benefit for both arms suppliers and buyers. The size of the purchasing agent's legitimate security need exhibited a vital function for the arms controlling regime. However, military uncertainty and heterogenous market conditions are expected to affect trade parameters.

Arms control

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Can political monetary cycles be avoided?

Article Abstract:

It was shown that political monetary cycles can be averted in a monetary government with Walsh-type contracts. Such contracts were originally planned to eradicate the inflationary prejudice of discretionary monetary policy. This needs some commitment device to implement the contract and hinder its renegotiation, but this was ruled out. Rather, Walsh contracts offer an effective signalling mechanism that eradicates the political monetary cycle.

Ethics, Research, Monetary policy, Political corruption, Political ethics, Business ethics

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