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Models of Currency Crises with Self-Fulfilling Features
Obstfeld, Maurice - 1995
The discomfort a government suffers from speculation against its currency determines the strategic incentives of speculators and the scope for multiple currency-market equilibria. After describing an illustrative model in which high unemployment may cause an exchange- rate crisis with...
Persistent link: https://www.econbiz.de/10012473585
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New Directions for Stochastic Open Economy Models
Obstfeld, Maurice - 1999
The paper develops a simple stochastic new open economy macroeconomic model based on sticky nominal wages. Explicit solution of the wage-setting problem under uncertainty allows one to analyze the effects of the monetary regime on welfare, expected output, and the expected terms of trade....
Persistent link: https://www.econbiz.de/10012471471
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The Fallacy of the Fiscal Theory of the Price Level
Buiter, Willem H. - 1999
or unsound argument'. The 'fiscal theory of the price level', recently re-developed by Woodford, Cochrane, Sims and … proponents of the fiscal theory of the price level do not accept the fundamental proposition that the government's intertemporal …. Policy conclusions could be drawn from the fiscal theory of the price level that would be harmful if they influenced the …
Persistent link: https://www.econbiz.de/10012471482
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EMU : Ready, or Not?
Obstfeld, Maurice - 1999
In this paper I focus on two specific hazard areas in the transition from Stage Two to Stage Three of European economic and monetary union (EMU), as well as on some key problems of Stage Three that EMU's monetary and fiscal structures appear ill-prepared to handle. The transitional hazards are...
Persistent link: https://www.econbiz.de/10012471509
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Liquidity Traps : How to Avoid Them and How to Escape Them
Buiter, Willem H. - 1999
The paper considers ways of avoiding a liquidity trap and ways of getting out of one. Unless lower short nominal interest rates are associated with significantly lower interest volatility, a lower average rate of inflation, which will be associated with lower expected nominal interest rates,...
Persistent link: https://www.econbiz.de/10012471545
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How Integrated are World Capital Markets? Some New Tests
Obstfeld, Maurice - 1986
This paper present some new empirical evidence on the extent of world capital-market integration. The first set of tests carried out uses data from different countries to compare internationally expected marginal rates of substitution between consumption on different dates. If residents of...
Persistent link: https://www.econbiz.de/10012476995
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Fiscal Prerequisites for a Viable Managed Exchange Rate Regime : A Non-technical Eclectic Introduction
Buiter, Willem H. - 1986
borrowing. There is not yet any "deep structural" theory justifying the (exogenous) lower bounds on the stock of foreign … exchange reserves characteristic of the collapsing exchange rate literature. Absent such a theory of "international liquidity …
Persistent link: https://www.econbiz.de/10012477028
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Death, Population Growth, Productivity Growth and Debt Neutrality
Buiter, Willem H. - 1986
Debt neutrality is said to occur if, given a program for public spending on current goods and services over time, the real equilibrium of the economy (private consumption, investment, relative prices, etc.) is independent of the pattern of government borrowing and lump-sum taxation over time....
Persistent link: https://www.econbiz.de/10012477043
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Structural and Stabilization Aspects of Fiscal and Financial Policy in the Dependent Economy
Buiter, Willem H. - 1986
The paper considers the response of a small, open dependent economy to a variety of fiscal and financial shocks as well as the influence of alternative budget balancing rules on the response of the system to such external shocks as a change in the world interest rate. The approach allows for...
Persistent link: https://www.econbiz.de/10012477047
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Ruling Out Nonstationary Speculative Bubbles
Obstfeld, Maurice - 1985
There is a large and growing empirical literature that tests forthe existence of asset-price bubbles or "sunspot" equilibria -- equilibria unrelated to market fundamentals. Our view is that even tests for non-stationary asset-price bubbles should not be interpreted as such. In the present paper...
Persistent link: https://www.econbiz.de/10012477481