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Target Balances and the German Financial Account in Light of the European Balance-of-Payments Crisis
Sinn, Hans-Werner; Wollmershäuser, Timo - CESifo - 2012
As shown in Sinn and Wollmershäuser (2012a), during the European balance-of-payments crisis, inter-governmental credit and Target credit granted by core-country central banks have replaced private international capital flows in financing the crisis countries' current account deficits, and even...
Persistent link: https://www.econbiz.de/10010814462
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Target Loans, Current Account Balances and Capital Flows: The ECB’s Rescue Facility
Sinn, Hans-Werner; Wollmershäuser, Timo - CESifo - 2011
The European Monetary Union is stuck in a severe balance of payments crisis. Greece, Ireland, Portugal and Spain in particular have suffered from balance of payment deficits whose accumulated value, as measured by the Target balances in the national central banks’ balance sheets, was 314...
Persistent link: https://www.econbiz.de/10009150656
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Smells Like Fiscal Policy? Assessing the Potential Effectiveness of the ECB's OMT Program
Hristov, Nikolay; Hülsewig, Oliver; Siemsen, Thomas; … - CESifo - 2014
This paper explores the potential effectiveness of the ECB’s Outright Monetary Transaction (OMT) program in safeguarding an appropriate monetary policy transmission. Since the program aims at manipulating bank lending rates by conducting sovereign bond purchases on secondary markets, a stable...
Persistent link: https://www.econbiz.de/10010877947
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Uncertainty and Fiscal Policy in an Asymmetric Monetary Union
Hefeker, Carsten; Zimmer, Blandine - CESifo - 2008
The paper examines the monetary-fiscal interactions in a monetary union model with uncertainty due to imperfect central bank transparency. We first show that monetary uncertainty disciplines fiscal policymakers and thereby reduces taxes, average inflation and output distortions. However, as more...
Persistent link: https://www.econbiz.de/10005013047
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Economic Policy Uncertainty, Trust and Inflation Expectations
Istrefi, Klodiana; Piloiu, Anamaria - CESifo - 2013
Theory and evidence suggest that in an environment of well-anchored expectations, temporary news or shocks to economic variables, should not affect agents’ expectations of inflation in the long term. Our estimated structural VARs show that both long- and short-term inflation expectations are...
Persistent link: https://www.econbiz.de/10010670794
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Strategic Interactions between Fiscal and Monetary Authorities in a Multi-Country New-Keynesian Model of a Monetary Union
Michalak, Tomasz; Engwerda, Jacob; Plasmans, Joseph - CESifo - 2009
In this paper we consider a number of key issues related to the policy coordination in a monetary union that has been recently discussed in the literature. To this end we propose a multi-country New-Keynesian model of a monetary union cast in the framework of linear quadratic differential games....
Persistent link: https://www.econbiz.de/10005405711
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Explosive Target Balances
Potrafke, Niklas; Reischmann, Markus - CESifo - 2013
Using the new unit root test by Phillips et al. (2011) we show that the Target balances of the German Bundesbank have been exploding from the beginning of 2009 to the beginning of 2013. By implementing a full-allotment policy and reducing the required minimum quality of collaterals in October...
Persistent link: https://www.econbiz.de/10010877929
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Target Losses in Case of a Euro Break-up
Sinn, Hans-Werner - CESifo - 2012
Evaluation of the financial costs of a Eurozone breakup depends critically on the interpretation of TARGET balances. While it has been argued that TARGET claims in the Eurozone can be written off without incurring any losses on the claimants as the value of fiat money is independent of the...
Persistent link: https://www.econbiz.de/10010592825
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The Price of Liquidity: Bank Characteristics and Market Conditions
Fecht, Falko; Nyborg, Kjell G.; Rocholl, Jörg - CESifo - 2009
We study differences in the price paid for liquidity across banks using price data at the individual bank level. Unique … to gauge the extent to which a bank is short or long liquidity. We find that the price a bank pays for liquidity depends … on the liquidity positions of other banks, as well as its own. There is evidence that liquidity squeezes occasionally …
Persistent link: https://www.econbiz.de/10005051588
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Outside versus Inside Bonds: A Modigliani-Miller Type Result for Liquidity Constrained Economies
Berentsen, Aleksander; Waller, Christopher - CESifo - 2010
When agents are liquidity constrained, two options exist — sell assets or borrow. We compare the allocations arising in …
Persistent link: https://www.econbiz.de/10008799751