Please select from the titles below:

• Financial Fluctuations and Fragility
• The Demand for Money in the European Union: Further Empirical Results
• Foreign Direct Investment in Poland: Is Low Cost Labour Really the Sole Determinant?
• Monotonic Movement of Price Vectors

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Financial Fluctuations and Fragility (p.1)
by D Green

Recent years have witnessed rapid financial sector liberalization, pronounced asset price fluctuations and costly episodes of financial fragility. Neoclassical economic analysis stresses the beneficial effects of financial market de-regulation and laissez-faire whilst post-Keynesian analysis highlights the inherent tendency of de-regulated financial markets to lead to financial instability. This paper reviews the contribution which these perspectives make to understanding the substantial asset price fluctuations of recent years and the specific development of the banking industries of the United States, Japan and three Nordic countries. The paper demonstrates that the post-Keynesian financial instability hypothesis contributes much to understanding these episodes of financial fragility whilst inappropriate regulation has also been a cause. Future policy should give a higher weighting to the pursuit of financial stability.

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The Demand for Money in the European Union: Further Empirical Results (p.15)
By Y Pu and G Zis

This study estimates a European Union wide demand for money function, for both narrow and broad definitions of money, which differs from others in terms of the specification of the long-run function, the definition of the explanatory variables, the sample period, the coverage of the aggregated data and the estimation methodology. The empirical findings presented suggest the existence of EU demand for money functions for both M1 and M2. This implies that increasing coordination of national monetary policies through the European Monetary Institute is likely to yield benefits for member countries.

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Foreign Direct Investment in Poland: Is Low Cost Labour Really the Sole Determinant? (p.29)
By D Floyd

Of late, much interest has been shown in the effects of Eastern European economic transition and its possible impact on international business. It has often been suggested that Eastern European economies such as Poland will have a major role to play in terms of low cost labour production for multinational firms. However, this is still far from being realised and equally important too, it is not clear that this would be the sole motivating factor for multinationals wishing to invest in Eastern Europe. This article attempts to establish the key determinants of foreign direct investment (FDI) activity in Poland by application of Dunning's theory of international production. This should help establish whether the common view of low cost labout being the sole determinant is justified.

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Monotonic Movement of Price Vectors (p.41)
By Ch Bidiard and I Steedman

It is well-known that long-period relative prices in a Sraffa-like analysis can change in an apparently complicated way as the uniform rate of profit (interest) changes. It is shown here how a certain simplicity of movement (monotonicity) can be detected.

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Page last modified on 26 May 2000