We study the impact of incomplete consumption risk-sharing on land misallocation in rural economies. We develop a general equilibrium model of land cultivation choices, where heterogeneous agricultural households face idiosyncratic output shocks and insure themselves by participating in a...

Labor mobility is commonly taken as a property of an optimal currency area. But how does that property affect the outcome of fiscal policies? We address this issue with a two country - two period model, where both asymmetric and symmetric productivity shocks may hit the countries. We show that...

During the sovereign debt crisis, all euro countries have deployed "austerity packages", believing that they could regain the path of growth implementing structural reforms and cutting government spending. Such policies should have led to an initial decline in GDP followed by recovery and a...

During the sovereign debt crisis, many Euro countries have deployed "austerity packages" implementing structural reforms and cutting government spending. Such policies should have led to an initial decline in GDP followed by recovery and a reduction of the debt to gdp ratio. Key to this outcome...

This article discusses a form of fiscal monetization that produces losses in the central bank's balance sheet, without a permanent increase in the money base. If an independent central bank acts as a long-sighted policymaker, an optimal helicopter monetary policy can be identified. At the same...

This paper builds a model of populism called Democratic Rioting in which citizens – i.e. the poor and the rich - are assumed to be heavily influenced by psychological group dynamics that result from banking shocks. We highlight a display of anger that is channelled through an election instead...