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In much of the world, growth is more stable than it once was. Looking at a sample of twentyfive countries, we find that in sixteen, real GDP growth is less volatile today than it was twenty years ago. And these declines are large, averaging more than fifty per cent. What accounts for the fact...
Persistent link: https://www.econbiz.de/10013215364
collapse of the economy. What lessons can we draw from our study of these events? In this essay, I argue that the Federal …
Persistent link: https://www.econbiz.de/10013224184
We evaluate the Friedman-Schwartz hypothesis that a more accommodative monetary policy could have greatly reduced the severity of the Great Depression. To do this, we first estimate a dynamic, general equilibrium model using data from the 1920s and 1930s. Although the model includes eight...
Persistent link: https://www.econbiz.de/10013309234
This paper develops the quantitative implications of optimal fiscal policy in a business cycle model. In a stationary equilibrium the ex ante tax rate on capital income is approximately zero. There is an equivalence class of ex post capital income tax rates and bond policies that support a given...
Persistent link: https://www.econbiz.de/10013114944
The US government has recently conducted large scale purchases of assets and implemented policies that reduced the cost of funds to financial institutions. Arguably these policies have helped to correct credit market dysfunctions, allowing interest rate spreads to shrink and output to begin a...
Persistent link: https://www.econbiz.de/10013123690
Persistent link: https://www.econbiz.de/10002685179
that an interest rate rule that is too narrowly focused on inflation destabilizes asset markets and the broader economy …
Persistent link: https://www.econbiz.de/10013137616
Macroeconomic and microeconomic data paint conflicting pictures of price behavior. Macroeconomic data suggest that inflation is inertial. Microeconomic data indicate that firms change prices frequently. We formulate and estimate a model which resolves this apparent micro - macro conflict. Our...
Persistent link: https://www.econbiz.de/10013245531
Central bankers and financial supervisors often have different goals. While monetary policymakers want to ensure that there are always sufficient lending activities to maintain high and stable economic growth, supervisors work to limit banks. lending capacities in order to prevent excessive...
Persistent link: https://www.econbiz.de/10013230822