Monetary Policy, Taxation, and International Investment Strategy

Written especially for portfolio managers, financial analysts and corporate economists, this volume considers the practical implications of government economic policies. The contributors illustrate how incentives and disincentives affect economic behaviour and the performance of the economy through an in-depth discussion of monetary, fiscal and international economic issues. In addition, the authors present a unique approach that enables the reader to trace the impact of government policies through the economy and thereby discover the investment strategies most likely to be successful within a given policy context. The first section of the book focuses on monetary issues and explores issues related to inflation, likely government intervention mechanisms to control inflation, variants of the monetarist model, interpretation of the demand curve, and the development of a portfolio strategy designed to take advantage of anticipated changes in financial variables. The next group of chapters looks at supply-side economics and analyzes the effects of the economic incentives and constraints imposed by government. Particular attention is paid to the effects of taxation policies on equity values, economic growth and savings. In the third section, the contributors present a view of selected international economic issues including the relationship between tax rate reductions and foreign exchange rates and the trade balance. The concluding section examines the portfolio strategies that can be derived from the analyses presented in previous chapters.