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On Keeping Your Powder Dry: Fiscal Foundations of Financial and Price Stability

Obstfeld, Maurice - C.E.P.R. Discussion Papers - 2013

Banking systems have rapidly grown to a point where for many countries bank assets amount to multiples of GDP. As a consequence, government’s capacity to provide stability-enhancing fiscal guarantees against systemic crises can no longer be taken for granted. As regulation of dynamic financial...

Persistent link: https://www.econbiz.de/10011084186

What Determines Government Spending Multipliers?

Corsetti, Giancarlo; Meier, André; Müller, Gernot - C.E.P.R. Discussion Papers - 2012

This paper studies how the effects of government spending vary with the economic environment. Using a panel of OECD countries, we identify fiscal shocks as residuals from an estimated spending rule and trace their macroeconomic impact under different conditions regarding the exchange rate...

Persistent link: https://www.econbiz.de/10011083665

One Money, but Many Fiscal Policies in Europe: What Are the Consequences?

Uhlig, Harald - C.E.P.R. Discussion Papers - 2002

This Paper outlines some issues regarding the interaction of independent fiscal authorities and one central bank in the European monetary union. It points out the possibilities for coordination failures, ranging everywhere from potentially excessive deficits and free-riding problems to...

Persistent link: https://www.econbiz.de/10005656196

Theoretical Notes on Bubbles and the Current Crisis

Martin, Alberto; Ventura, Jaume - C.E.P.R. Discussion Papers - 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/10008684673

Political Credit Cycles: The Case of the Euro Zone

Fernández-Villaverde, Jesús; Garicano, Luis; Santos, Tano - C.E.P.R. Discussion Papers - 2013

We study the mechanisms through which the adoption of the Euro delayed, rather than advanced, economic reforms in the Euro zone periphery and led to the deterioration of important institutions in these countries. We show that the abandonment of the reform process and the institutional...

Persistent link: https://www.econbiz.de/10011084343

Managed Floating: Understanding the New International Monetary Order

Bofinger, Peter; Wollmershaeuser, Timo - C.E.P.R. Discussion Papers - 2001

Although there seems to be a broad consensus among economists that purely floating or completely fixed exchange rates (the so-called corner solutions) are the only viable alternatives of exchange rate management, many countries do not behave according to this paradigm and adopt a strategy within...

Persistent link: https://www.econbiz.de/10005114175

Has the Euro changed the Business Cycle?

Enders, Zeno; Jung, Philip; Müller, Gernot - C.E.P.R. Discussion Papers - 2012

In contrast to the notion that the exchange-rate regime is non-neutral, there is little evidence that EMU has systematically changed the European business cycle. In fact, we find the volatility of macroeconomic variables largely unchanged before and after the introduction of the euro. Exceptions...

Persistent link: https://www.econbiz.de/10011084347

Bubbles and Central Banks: Historical Perspectives

Brunnermeier, Markus K; Schnabel, Isabel - C.E.P.R. Discussion Papers - 2015

This paper reviews some of the most prominent asset price bubbles from the past 400 years and documents how central … banks (or other institutions) reacted to those bubbles. The historical evidence suggests that the emergence of bubbles is … also suggests that a purely passive “cleaning up the mess” stance toward the buildup of bubbles is, in many cases, costly …

Persistent link: https://www.econbiz.de/10011249380

With a Bang, Not a Whimper: Pricking Germany's 'Stock Market Bubble' in 1927 and the Slide into Depression

Voth, Hans-Joachim - C.E.P.R. Discussion Papers - 2002

Asset price inflation presents central banks with a puzzle. I examine the case of Germany, 1925-7, when the Reichsbank intervened to bring down stock prices, rectify imbalances and curb speculation. Present value relations, comparisons with historical valuation measures and the time-series...

Persistent link: https://www.econbiz.de/10005792124

Fiscal Policy Can Reduce Unemployment: But There is a Better Alternative

Farmer, Roger E A - C.E.P.R. Discussion Papers - 2009

This paper uses a model with a continuum of equilibrium unemployment rates to explore the effectiveness of fiscal policy. The existence of multiple steady states is explained by a model of costly search and recruiting that leads to a situation of bilateral monopoly. Using this framework, I...

Persistent link: https://www.econbiz.de/10008567800

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