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In a small structural model we find asymmetries in the effects of monetary policy in Germany depending on whether the economy is in an upswing or a downswing. These two different regimes are also identified using a Markov-switching model and the Kalman filter. Our results indicate that the...
Persistent link: https://www.econbiz.de/10004963955
central bank puts a higher weight on stabilizing inflation in the country with a higher degree of nominal rigidity continues …-country disparities in the degree of price rigidities on the volatility of inflation are amplified. While the volatility of inflation in … the economy with a higher degree of price rigidity is almost as low as in the model without borrowers, inflation in the …
Persistent link: https://www.econbiz.de/10011128094
central bank puts a higher weight on stabilizing inflation in the country with a higher degree of nominal rigidity continues …-country disparities in the degree of price rigidities on the volatility of inflation are amplified. While the volatility of inflation in … the economy with a higher degree of price rigidity is almost as low as in the model without borrowers, inflation in the …
Persistent link: https://www.econbiz.de/10010661280
The paper analyzes the integration of euro area sovereign bond markets during the European sovereign debt crisis. It tests for contagion (i.e., an intensification in the transmission of shocks across countries), fragmentation (a reduction in spillovers) and flight-to-quality patterns, exploiting...
Persistent link: https://www.econbiz.de/10011273259
This paper argues that counter-cyclical liquidity hoarding by financial intermediaries may strongly amplify business cycles. It develops a dynamic stochastic general equilibrium model in which banks operate subject to financial frictions and idiosyncratic funding liquidity risk in their...
Persistent link: https://www.econbiz.de/10011128868
During the last years, gravity equations have leapt from the trade literature over into the literature on financial markets. Martin and Rey (2004) were the first to provide a theoretical model for cross-border asset trade, yielding a structural gravity equation that could be tested empirically....
Persistent link: https://www.econbiz.de/10010896125
Government interventions into the financial system in the form of bail out operations or liquidity assistance are often justified with the systemic importance of large banks for the real economy. In this paper, we test whether idiosyncratic shocks to loan growth at large banks have effects on...
Persistent link: https://www.econbiz.de/10010896126
This paper investigates to what extent the R&D behavior of manufacturing companies was influenced by the 2008/09 crisis. Based on a broad official data set for German manufacturing companies, only a few companies that engaged in R&D during 2008 gave it up in the following year. Some companies...
Persistent link: https://www.econbiz.de/10010896184
We explore the impact of large banks and of financial openness for aggregate growth. Large banks matter because of granular effects: if markets are very concentrated in terms of the size distribution of banks, idiosyncratic shocks at the bank-level do not cancel out in the aggregate but can...
Persistent link: https://www.econbiz.de/10010896187
Expectations form the basis of economic decisions of market participants in an uncertain world. Sentiment indicators reflect those expectations and thus have a proven track record for predicting economic variables. However, respondents of surveys perceive the world to a large extent with the...
Persistent link: https://www.econbiz.de/10010786994