We develop a model which accounts for the observed equity premium and average risk free rate, without implying counterfactually high risk aversion. The model also does well in accounting for business cycle phenomena.

The volume collects the essays presented at the 15th Workshop on Public Finance organised by Banca d'Italia in Perugia from 4 to 6 April 2013. The workshop focused on the link between fiscal policy and macroeconomic imbalances and comprised four sessions. The first session concentrated on the...

In the 1970s, large increases in the price of oil were associated with sharp decreases in output and large increases in inflation. In the 2000s, even larger increases in the price of oil were associated with much milder movements in output and inflation. Using a structural VAR approach,...

We survey the existing work on the cross-country differences in the transmission of European monetary policy. We find that prior work, focusing on macroeconomic data, does not clearly answer the question posed in the title and offer some explanations for the ambiguity. Aside from the...

This paper studies the role of credit-supply factors in business cycle fluctuations. For this purpose, we introduce an imperfectly competitive banking sector into a DSGE model with financial frictions. Banks issue collateralized loans to both households and firms, obtain funding via deposits and...

This paper presents new evidence on the monetary transmission mechanism based on the effects of unexpected monetary policy shocks on 21 manufacturing industries in 5 OECD countries (France, Germany, Italy, the UK and the US). The goal is twofold. First, to document the crossindustry...

Since the adoption of flexible exchange rates, real exchange rates have been much more volatile than they were under Bretton Woods. However, the volatilities of most other macroeconomic variables have remained approximately unchanged. This poses a puzzle for standard international business cycle...

The paper studies the transmission of monetary policy shocks in Italy, by means of a structural VAR, using a long data sample; focusing on a long sample period permits a comparison between the Italian evidence and the international literature and makes it possible to test the robustness of the...

We survey the existing work on the cross-country differences in the transmission of European monetary policy. We find that prior work, focusing on macroeconomic data, does not clearly answer the question posed in the title and offer some explanations for the ambiguity.

This paper presents new evidence on the monetary transmission mechanism based on the effects of unexpected monetary policy shocks on 21 manufacturing industries in 5 OECD countries (France, Germany, Italy, the UK and the US). The goal is twofold. First, to document the cross-industry...