Browsing by Author "Willman, Alpo"

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  • Willman, Alpo (1987)
    Tutkimusyksikkö. Monistettuja tutkimuksia 16/1987
    We show that if domestic and foreign bonds are imperfect substitutes for each other and the exchange rate is fixed, then, unlike under the perfect substitutability assumption, uncertainty about monetary policy reactions affects the timing of balance-of-payments crises.
  • Tarkka, Juha; Willman, Alpo; Männistö, Hanna-Leena (1989)
    Bank of Finland Research Discussion Papers 9/1989
    This report describes the determination of private consumption and investment in the BOF4 model. The consumption function of the model is largely based on thepermanent income hypothesis. Relative prices and the level of aggregate consumption determine the shares of the three consumption subgroups included in the aggregate. The non-residential investment equations are derived from the capital owners' intertemporal profit maximization problem in accordance with the neoclassical investment theory. Modelling of residential investment is based on Tobin's approach and that of inventories on the buffer stock-accelerator approach. The properties of the equations are illustrated by means of tables of dynamic elasticities throughout the paper.
  • Willman, Alpo (1988)
    Bank of Finland Research Discussion Papers 8/1988
    Forthcoming in the Scandinavian Journal af Economics
    In this paper balance-of-payments crises are studied in a framework in which investors do not know the threshol~ level of foreign reserves, the attainment of which implies that the central bank abandons its fixed exchange target. Investors are alternatively risk neutral or risk averters. It is shown that, depending on whether the threshold level is stochastic or fixed but unknown to investors, currency speculation reveals itself as, respectively, a speculative outflow distributed over a longer time period or a sudden speculative attack on the currency.
  • Willman, Alpo (1987)
    Tutkimusyksikkö. Monistettuja tutkimuksia 5/1987
    There is general agreement that a regime of fixed exchange rates can be sustained only if domestic economic policy is consistent with it. An excessively expansive monetary policy, for instance, leads to the depletion of foreign reserves, eventually forcing the central bank to either devalue the currency or allow it to float. However, speculative attacks on the currency have typically been preceded by a change in the foreign exchange target.
  • Willman, Alpo (1976)
    Suomen Pankki. D 38
    Tämä tutkimus keskittyy kokonaismallin julkisen talouden lohkon esittelyyn sekä erilaisten finanssipoliittisten toimenpiteiden vaikutusten mittaamiseen. Tutkimus on kolmivaiheinen. Ensimmäisessä vaiheessa, joka muodostuu luvuista II - VI, rakennetaan julkisen talouden lohkolIe malli ja esitellään lohkon kytkennät kokonaismallin muihin osiin. Lohko muodostuu välittömien verojen kantoa kuvaavasta systeemistä sekä valtiontalouden, kansaneläkelaitoksen ja kuntien talouden osalohkoista. Sekä julkiset tulot että menot on melko pitkälle disaggregoitu ja niiden kehitystä on pyritty selittämään toisaalta julkisen vallan kontrollissa olevien päätösmuuttujien ja toisaalta kokonaismallin kannalta endogeenisten muuttujien avulla. Koska tulosten luotettavuus riippuu käytettävän menetelmän validisuudesta, tutkitaan toisessa vaiheessa kokonaismallin ennustekykyä. Tarkastelu suoritetaan ns. ex post ennusteiden valossa, jolloin ennalta määrätyistä muuttujista käytetään niiden toteutuneita arvoja. Kokonaismallin ennustekykyä käsitellään tutkimuksen VII luvussa. VIII luvussa, jossa kuvataan tutkimuksen kolmatta vaihetta, esitetään erilaisten finanssipoliittisten toimenpiteiden vaikutusten mittaamista. Niitä mitataan toisaalta keskeisten kokonaistaloudellisten tavoitemuuttujien kannalta ja toisaalta valtion budjetti tasapainon kannalta. Myös valtion tulojen ja menojen erotuksena syntyvän valtion rahoitustarpeen rahoitusmarkkinoiden kautta tapahtuvan vaikutuksen suuruutta tutkitaan.
  • Tarkka, Juha; Willman, Alpo (1988)
    Bank of Finland Research Discussion Papers 3/1988
    Specification of the volume and price equation of Finlands multilateral exports of goods is based on the assumption that Finnish products enjoy only temporary monopoly power. In the context of the whole model this implies that the price of exports of goods as well as short-run marginal costs converge towards a level determined solely by competing foreign prices. The modelling of Finlands bilateral trade is based on the assumption that the value of bilateral exports adjusts to the value of bilateral imports, which, in turn, is determined by Finnish demand for imports from eastern markets. Modelling of the trade in services and imports, excluding imports of oil, fuels and lubricants, is quite conventional: the volume of exports of services and the volumes of imports depend on relevant relative price and activity variables. The modelling of imports of crude oil, fuel and lubricants is based on the assumption that imports of energy are a residual determined by the demand for and the domestic supply of energy.
  • Tarkka, Juha; Willman, Alpo (1990)
    Bank of Finland Research Discussion Papers 1/1990
    This paper describes the modelling of financial markets and the balance of payments in BOF4, a quarterly macroeconomic model developed by the Bank of Finland. The short-term interest rate is determined as a result of the interaction of the demand for money and money supply, as in the conventional IS-LM approach. Alternatively, the model may be solved under the assumption that monetary policy is based on pegging interest rates. In that case, the domestic credit of the Central Bank is the equilibrating variable.
  • Willman, Alpo (1988)
    Bank of Finland Research Discussion Papers 17/1988
    In this paper the BOF4 model of the Bank of Finland, which is estimated in a fi xed exchange rate - regime, i s transformed into a model with a floating exchange, rate. In endogenizing the exchange rate two al ternative assumpti ons about the formati on of exchange rate expectations are used, i.e. static and marketspecific (MS) rational expectations. We found that under static expectations the adjustment paths of the exchange rate were very volatile when shocks originated from the financial market. In response to real shocks, however, the results were not sensitive with respect to the alternative expectations formation schemes. In the case of MS-rational expectations the reactions of the exchange rate to real ,and financial shocks were, also somewha't greater than typically presented in the literature. In addition, the response paths were highly cyclical.
  • Tarkka, Juha; Willman, Alpo (1990)
    Bank of Finland Research Discussion Papers 7/1990
    This paper describes how income distribution and government finances are modelled i n BOF4, a quarterly econometric model of the Bank of Finland. The equations eomprising the ineome distribution and government finanees bloek in the model eonsist of tax equations, behavioural equations for the local government sector and a large number of accounting identities linking produetion and prices to incomes ofhouseholds and other seetors of the economy.
  • Willman, Alpo (1980)
    Suomen Pankki. Yleistajuiset selvitykset. A 51/1980
    SISÄLLYS 1. JOHDANTO 2. JULKISTEN MENOJEN KEHITYS VUOSINA 1950 - 1977 3. JULKISET KULUTUS- JA INVESTOINTIMENOT 4. SIIRTOMENOT 4.1. Tulonsiirrot kotitalouksille 4.2. Tukipalkkiot elinkeinoille 4.2.1. Tukipalkkiot maataloudelle 4.2.2. Muille elinkeinolie myönnetyt tukipalkkiot 4.3. Korkotuki 5. VALTION JA KANSANELÄKELAITOKSEN LAINANANTO JA 7. VALTION TAKAUS TOIMINTA 7.1. Valtiokonttorin hoidossa olevat valtion takaukset 7.2. Valtiontakauslaitos 7.3. Vientitakuulaitos 8. YHTEENVETO LÄHTEET LIITETAULUKOT SUMMARY
  • Tarkka, Juha; Willman, Alpo; Rasi, Chris-Marie (1989)
    Bank of Finland Research Discussion Papers 6/1989
    This paper describes the supply of labour and the determination of wages and prices in the BOF4 model. Labour supply is modelled as a function of real wage, income and discouraged worker effects. Wages are a functi on of the unemployment rate. Besides that they respond to the deviation of actual wages from equilibrium wages dictated by nominal marginal productivity. Expected inflation and taxation are entered through the separate treatment of negotiated wages. Manufacturing is assumed to be the wage leader in the economy so that developments in other sectors are affected by the wage drift in manufacturing and are tied to manufacturing wages also in the long-run.
  • Tarkka, Juha; Männistö, Hanna-Leena; Willman, Alpo (1990)
    Bank of Finland Research Discussion Papers 2/1990
    This paper describes the structure and simulation properties of the Bank of Finland's macroeconometric model BOF4. BOF4 is a quarterly, medium-sized macro model of the Finnish economy, consisting of about 70 behavioural equations. Including accounting identities and technical linkages of variables, the overall size of the model is about 270 equations. It replaced the previous (BOF3) model version in 1987, and has been used regularly thereafter for forecasting and policy analysis.
  • Tarkka, Juha; Willman, Alpo; Rasi, Chris-Marie (1988)
    Bank of Finland Research Discussion Papers 14/1988
    This paper contains a description of the production and labour demand sections of the BOF4 model. CES value added production functions are developed and estimated for the five sectors of the economy. From these the marginal product of labour and capital functions are derived which are important factors in determining investments and the prices of gross outputs in each of the sectors. The demand for labour hours is defined as a gradual adjustment process towards the level determined by the inverted production' functions. An input-output model is used to determine output and value-added deflators by sectors as well as the prices of the different demand components.
  • Willman, Alpo (1992)
    Suomen Pankki. B = Bank of Finland. B 46
    Preface 5 1 Introduction 9 2 A Survey of the Literature on Balance-of-Payments Crises 11 2.1 A balance-of-payments crisis in the F-G model 11 2.2 Extensions of the analysis and further results 13 2.2.1 Balance-of-payments crises in intertemporal. optimization models 15 2.2.2 The minimum level of net foreign reserves 17 2.2.3 Balance-of-payments crises and devaluation 19 2.2.4 Imperfect foresight and balance-of-payments crises 20 2.2.4.1 Stochastic models of balance-of- payments crises 20 2.2.4.2 Uncertainty in deterministic models of balance-of-payments. crises 22 2.2.5 Stabilization policies and balance-of- payments crises 25 2.2.6 Capital controls, imperfect asset substitutability and balance-of-payments crises 27 2.2.7 Real output, prices and wages and balance-of-payments crises 28 2.2.8 Other extensions of the analysis 30 3 Summaries of the Papers 31 3.1 Why there is a lower bound on the central bank's foreign reserves 32 3.2 Speculative attacks on the currency with uncertain monetary policy reactions 35 3.3 Balance-of-payments crises and monetary policy reactions in a model with imperfect substitutability between domestic and foreign bonds 37 3.4 Devaluation expectations and speculative attacks on the currency 39 3.5 The collapse of the fixed exchange rate regime with sticky wages and imperfect substitutability between domestic and foreign bonds 42 Notes 45 References 47 Appendix 52
  • Willman, Alpo (1975)
    Suomen Pankki. Yleistajuiset selvitykset. A 40
    Oheinen selvitys kuuluu osana Suomen Pankin tutkimusosastolla vuoden 1974 aikana tehtyihin kokonaistaloudellisia investointikriteerejä koskeviin tutkimuksiin. Tämä tutkimus on periaatteellis-empiirinen ja siinä tarkastellaan suhdanneherkkyyttä, omavaraisuutta ja ympäristövaikutuksia sekä mahdollisuuksia muodostaa niistä suoraan kriteerejä investointipolitiikan suunnittelun avuksi. Lisäksi pyritään arvioimaan suhdanneherkkyyden, omavaraisuuden ja ympäristövaikutusten mittaamista muilla kokonaistaloudellisilla kriteereillä.
  • Suomen Pankki; Tarkka, Juha; Willman, Alpo (1985)
    Suomen Pankki. D 59
    Oheinen julkaisu koostuu BOF3-mallin makroteoreettista kehikkoa, mallin eri osalohkoja ja mallin toimivuutta koskevista luvuista sekä mallin yhtälö- ja muuttujaluettelosta. Eri luvut ovat mallin tätä versiota tehneiden tutkijoiden laatimia, suhteellisen itsenäisiä tutkimusraportteja.
  • Willman, Alpo; Tarkka, Juha (1985)
    Bank of Finland. Monthly Bulletin 59 ; 11 ; November
  • Willman, Alpo; Kortelainen, Mika; Männistö, Hanna-Leena; Tujula, Mika (1998)
    Suomen Pankin keskustelualoitteita 10/1998
    This report is the basic documentation of the present (fifth) version of the Bank of Finland macroeconomic model, BOF5, built for policy simulation and forecasting.In constructing the model, consistent treatment of expectations is emphasized.Following current theoretical literature, intertemporal optimization with rational expectations is taken as the starting point, and Euler equations are applied in the estimation of the key behavioural equations.Consistent treatment of technology on the supply side has been another important aim.We illustrate the properties of the model with some simulation experiments.A complete list of equations and an outline of the derivation of the key equations are presented.We also show how forward-looking equations have been transformed to facilitate simulation under alternative assumptions concerning the formation of expectations. Keywords: macroeconomic models, Finland, econometric modelling, policy simulations, expectations, Euler equations
  • Willman, Alpo; Männistö, Hanna-Leena (1997)
    Bank of Finland. Bulletin 71 ; 5 ; May
  • Willman, Alpo (1987)
    Tutkimusyksikkö. Monistettuja tutkimuksia. Research Papers. 8/1987
    The paper extends the recent literature on balance-of-payments crises by allowing real effects to be connected with them. The collapse of the fixed exchange rate regime and the dynamics associated with this regime shift are studied. In addition, the effects of a fiscal expansion under the fixed exchange rate regime are studied, taking into account the fact that the viability of the regime is policy dependent.