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Theoretical Notes on Bubbles and the Current Crisis

Martin, Alberto; Ventura, Jaume - Barcelona Graduate School of Economics (Barcelona GSE) - 2010

We explore a view of the crisis as a shock to investor sentiment that led to the collapse of a bubble or pyramid scheme in financial markets. We embed this view in a standard model of the financial accelerator and explore its empirical and policy implications. In particular, we show how the...

Persistent link: https://www.econbiz.de/10010851442

Managing Credit Bubbles

Martín, Alberto; Ventura, Jaume - Barcelona Graduate School of Economics (Barcelona GSE) - 2015

are too low. In this environment, changes in investor sentiment or market expectations can give rise to credit bubbles … instead by expectations of future credit (i.e. bubbly collateral). Credit bubbles raise the availability of credit for …

Persistent link: https://www.econbiz.de/10011266628

Economic Growth with Bubbles

Ventura, Jaume; Martin, Alberto - Barcelona Graduate School of Economics (Barcelona GSE) - 2010

We develop a stylized model of economic growth with bubbles. In this model, financial frictions lead to … equilibriumdispersion in the rates of return to investment. During bubbly episodes, unproductive investors demand bubbles while productive … dynamically ineﬃcient: otherwise, there would be no demand for bubbles. This dynamic ineficiency, however, might be generated by …

Persistent link: https://www.econbiz.de/10010547394

Understanding Bubbly Episodes

Carvalho, Vasco; Martín, Alberto; Ventura, Jaume - Barcelona Graduate School of Economics (Barcelona GSE) - 2012

Persistent link: https://www.econbiz.de/10010547407

Boycott or Buycott?: Internal Politics and Consumer Choices

Cuadras-Morató, Xavier; Raya, Josep Maria - Barcelona Graduate School of Economics (Barcelona GSE) - 2014

Do political tensions affect economic relations? In particular, does politics significantly affect consumer choices? Firms are often threatened by consumer boycotts that pretend to modify their business strategies and behavior. Sometimes these are caused by general political conflicts. The main...

Persistent link: https://www.econbiz.de/10010851366

Nominal Debt as a Burden on Monetary Policy

Díaz-Giménez, Javier; Giovanetti, Giorgia; Marimon, Ramon - Barcelona Graduate School of Economics (Barcelona GSE) - 2003

We study the effects of nominal debt on the optimal sequential choice of monetary policy. When the stock of debt is nominal, the incentive to generate unanticipated inflation increases the cost of the outstanding debt even if no unanticipated inflation episodes occur in equilibrium. Without full...

Persistent link: https://www.econbiz.de/10010851438

Circulation of Private Notes during a Currency Shortage

Cuadras, Xavier - Barcelona Graduate School of Economics (Barcelona GSE) - 2005

This paper provides a search theoretical model that captures two phenomena that have characterized several episodes of monetary history: currency shortages and the circulation of privately issued notes. As usual in these models, the media of exchange are determined as part of the equilibrium. We...

Persistent link: https://www.econbiz.de/10010851497

A Medium-Scale New Keynesian Open Economy Model of Australia

Jääskelä, Jarkko P.; Nimark, Kristoffer - Barcelona Graduate School of Economics (Barcelona GSE) - 2011

We estimate a new Keynesian open economy dynamic stochastic general equilibrium model of Australia with a large number of shocks, frictions and rigidities, matching a large number of observable time series. We find that both foreign and domestic shocks are important drivers of the Australian...

Persistent link: https://www.econbiz.de/10010547106

Monetary Policy with Heterogeneous Collateralized Borrowing

Suárez-Lledó, José - Barcelona Graduate School of Economics (Barcelona GSE) - 2009

Secured debt has become a predominant form of credit. The purpose of this paper is to analyze collateral in a model of money and its interaction with monetary policy. Borrowing capacity, and ultimately consumption, is linked to the value of the asset that serves as collateral, specific to each...

Persistent link: https://www.econbiz.de/10010851491

Rule-of-Thumb Consumers and the Design of Interest Rate Rules

Galí, Jordi; Pérez-Salido, J. David - Barcelona Graduate School of Economics (Barcelona GSE) - 2003

We introduce rule-of-thumb consumers in an otherwise standard dynamic sticky price model, and show how their presence can change dramatically the properties of widely used interest rate rules. In particular, the existence of a unique equilibrium is no longer guaranteed by an interest rate rule...

Persistent link: https://www.econbiz.de/10010851326