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Financial crises and exchange rate policy

Fornaro, Luca - Department of Economics and Business, Universitat … - 2014

This paper studies exchange rate policy in a small open economy model featuring an occasionally binding collateral constraint and Fisherian deflation. The goal is to evaluate the performance of alternative exchange rate policies in sudden stop-prone economies. The key element of the analysis is...

Persistent link: https://www.econbiz.de/10011099199

The real estate and credit bubble: Evidence from Spain

Akin, Ozlem; Montalvo, José Garcia; Villar, Jaume Garcia; … - Department of Economics and Business, Universitat … - 2014

-employed are identical to employed borrowers during the boom. Banks with worse corporate governance problems soften even more the … standards. Finally, we analyze the mechanism by which banks could increase the supply of mortgage loans despite of regulatory … restrictions on LTVs. The evidence is consistent with banks encouraging real estate appraisal firms to introduce an upward bias in …

Persistent link: https://www.econbiz.de/10010796201

International debt deleveraging

Fornaro, Luca - Department of Economics and Business, Universitat … - 2012

I provide a framework for understanding debt deleveraging in a group of financially integrated countries. During an episode of international deleveraging world consumption demand is depressed and the world interest rate is low, reflecting a high propensity to save. If exchange rates are allowed...

Persistent link: https://www.econbiz.de/10010849607

Balance sheet recessions with informational and trading frictions

Asriyan, Vladimir - Department of Economics and Business, Universitat … - 2015

Balance sheet recessions result from concentration of macroeconomic risks on the balance sheets of leveraged agents. In this paper, I argue that information dispersion about the future states of the economy combined with trading frictions in financial markets can explain why such concentration...

Persistent link: https://www.econbiz.de/10011127589

Theoretical notes on bubbles and the current crisis

Martin, Alberto; Ventura, Jaume - Department of Economics and Business, Universitat … - 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/10008587798

The optimum quantity of money: Theory and evidence

Mulligan, Casey B.; Sala-i-Martin, Xavier - Department of Economics and Business, Universitat … - 1997

In this paper we propose a simple and general model for computing the Ramsey optimal inflation tax, which includes several models from the previous literature as special cases. We show that it cannot be claimed that the Friedman rule is always optimal (or always non--optimal) on theoretical...

Persistent link: https://www.econbiz.de/10005772318

Monetary policy and exchange rate volatility in a small open economy

Galí, Jordi; Monacelli, Tommaso - Department of Economics and Business, Universitat … - 2004

We lay out a small open economy version of the Calvo sticky price model, and show how the equilibrium dynamics can be reduced to simple representation in domestic inflation and the output gap. We use the resulting framework to analyze the macroeconomic implications of three alternative...

Persistent link: https://www.econbiz.de/10005704982

Back to square one: Identification issues in DSGE models

Canova, Fabio; Sala, Luca - Department of Economics and Business, Universitat … - 2005

We investigate identifiability issues in DSGE models and their consequences for parameter estimation and model evaluation when the objective function measures the distance between estimated and model impulse responses. We show that observational equivalence, partial and weak identification...

Persistent link: https://www.econbiz.de/10005772125

Labor markets and monetary policy: A new-Keynesian model with unemployement

Blanchard, Olivier; Galí, Jordi - Department of Economics and Business, Universitat … - 2006

We construct a utility-based model of fluctuations, with nominal rigidities and unemployment, and draw its implications for the unemployment-inflation trade- off and for the conduct of monetary policy. We proceed in two steps. We first leave nominal rigidities aside. We show that, under a...

Persistent link: https://www.econbiz.de/10005772253

Real wage rigidities and the new Keynesian model

Blanchard, Olivier; Galí, Jordi - Department of Economics and Business, Universitat … - 2005

Most central banks perceive a trade-off between stabilizing inflation and stabilizing the gap between output and … model is extended to allow for real wage rigidities, the divine coincidence disappears, and central banks indeed face a …

Persistent link: https://www.econbiz.de/10005772405