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The European Phillips Curve: Does the NAIRU Exist?
Karanassou, Marika; Sala, Hector; Snower, Dennis J. - C.E.P.R. Discussion Papers - 2003
model, covering a panel of EU countries, and derives the implied long-run inflation-unemployment tradeoff. Our results …
Persistent link: https://www.econbiz.de/10005667015
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Escaping Nash and Volatile Inflation
Ellison, Martin; Yates, Tony - C.E.P.R. Discussion Papers - 2007
inflation volatility, we unwind one of Sargent's simplifications and allow the monetary authority to react to some of the shocks … were also persuaded to stop using changes in inflation to offset shocks. Inflation and inflation volatility therefore …Why is inflation so much lower and at the same time more stable in developed economies in the 1990s, compared with the …
Persistent link: https://www.econbiz.de/10005504556
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The Return of Financial Repression
Reinhart, Carmen M. - C.E.P.R. Discussion Papers - 2012
Periods of high indebtedness have historically been associated with a rising incidence of default or restructuring of public and private debts. Sometimes the debt restructuring is more subtle and takes the form of 'financial repression'. Consistent negative real interest rates are equivalent to...
Persistent link: https://www.econbiz.de/10011083679
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The Stock Market Crash of 2008 Caused the Great Recession: Theory and Evidence
Farmer, Roger E A - C.E.P.R. Discussion Papers - 2011
This paper argues that the stock market crash of 2008, triggered by a collapse in house prices, caused the Great Recession. The paper has three parts. First, it provides evidence of a high correlation between the value of the stock market and the unemployment rate in U.S. data since 1929....
Persistent link: https://www.econbiz.de/10009351524
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Housing Wealth isn't Wealth
Buiter, Willem H. - C.E.P.R. Discussion Papers - 2008
A fall in house prices due to a change in fundamental value redistributes wealth from those long housing (for whom the fundamental value of the house they own exceeds the present discounted value of their planned future consumption of housing services) to those short housing. In a representative...
Persistent link: https://www.econbiz.de/10005792518
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Consumption, 'Credit Crunches' and Financial Deregulation
Scott, Andrew - C.E.P.R. Discussion Papers - 1996
We examine whether credit contributes to business cycle fluctuations by directly affecting consumption rather than through the now well-understood investment channel. Examining UK data we argue that consumers face a rising interest rate schedule whereby additional borrowing leads to higher...
Persistent link: https://www.econbiz.de/10005124444
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Credit Channels in a Liquidity Trap
Mertens, Karel; Ravn, Morten O - C.E.P.R. Discussion Papers - 2011
We study liquidity trap dynamics driven by nonfundamental shifts in expectations in a model with nominal rigidities, housing, credit frictions and a Taylor rule. Highly leveraged borrowing through nominal debt backed by real estate collateral greatly magnifies the decline in output and house...
Persistent link: https://www.econbiz.de/10008921771
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The Social Cost of Near-Rational Investment
Hassan, Tarek; Mertens, Thomas M. - C.E.P.R. Discussion Papers - 2014
We show that the stock market may fail to aggregate information even if it appears to be efficient and that the resulting decrease in the information content of stock prices may drastically reduce welfare. We solve a macroeconomic model in which information about fundamentals is dispersed and...
Persistent link: https://www.econbiz.de/10011083430
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Information Aggregation in a DSGE Model
Hassan, Tarek; Mertens, Thomas M. - C.E.P.R. Discussion Papers - 2014
We introduce the information microstructure of a canonical noisy rational expectations model (Hellwig, 1980) into the framework of a conventional real business cycle model. Each household receives a private signal about future productivity. In equilibrium, the stock price serves to aggregate and...
Persistent link: https://www.econbiz.de/10011083546
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Imperfect Information and Aggregate supply
Mankiw, N Gregory; Reis, Ricardo - C.E.P.R. Discussion Papers - 2010
This paper surveys the research in the past decade on imperfect information models of aggregate supply and the Phillips curve. This new work has emphasized that information is dispersed and disseminates slowly across a population of agents who strategically interact in their use of information....
Persistent link: https://www.econbiz.de/10008468556