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Theoretical notes on bubbles and the current crisis

Martin, Alberto; Ventura, Jaume - European Central Bank - 2011

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/10009643615

Learning from experience in the stock market

Nakov, Anton; Nuño, Galo - European Central Bank - 2011

We study the dynamics of a Lucas-tree model with finitely lived agents who "learn from experience." Individuals update expectations by Bayesian learning based on observations from their own lifetimes. In this model, the stock price exhibits stochastic boom-and-bust fluctuations around the...

Persistent link: https://www.econbiz.de/10009371717

The disappearing tax base: is foreign direct investment eroding corporate income taxes?

Gropp, Reint; Kostial, Kristina - European Central Bank - 2000

This paper analyzes the link between Foreign Direct Investment (FDI), corporate taxation, and corporate tax revenues …

Persistent link: https://www.econbiz.de/10005816177

Global inflation

Ciccarelli, Matteo; Mojon, Benoît - European Central Bank - 2005

This paper shows that inflation in industrialized countries is largely a global phenomenon. First, inflations of (22) OECD countries have a common factor that alone account for nearly 70% of their variance. This large variance share that is associated to Global Inflation is not only due to the...

Persistent link: https://www.econbiz.de/10005816183

Investment, the cost of capital, and monetary policy in the nineties in France: a panel data investigation

Chatelain, Jean-Bernard; Tiomo, André - European Central Bank - 2001

investment from 1990 to 1999 through the cost-of-capital and the cash-flow channels. We compare several specifications of neo …

Persistent link: https://www.econbiz.de/10005344839

Financial flexibility across the euro area and the UK

Ferrando, Annalisa; Marchica, Maria-Teresa; Mura, Roberto - European Central Bank - 2014

investment decisions. Our findings support the hypothesis that financial flexibility relates to companies’ ability to undertake … future investment, despite market frictions hampering possible profitable growth opportunities. JEL Classification: G31, G32 …

Persistent link: https://www.econbiz.de/10010753764

Firm investment and monetary transmission in the euro area

Chatelain, Jean-Bernard; Generale, Andrea; Hernando, Ignacio - European Central Bank - 2001

We present a comparable set of results on the monetary transmission channels on firm investment for the four largest … channel. For each of those countries we estimate neo-classical investment relationships, explaining investment by its user … cost, sales and cash flow. We find investment to be sensitive to user cost changes in all those four countries. This …

Persistent link: https://www.econbiz.de/10004969190

The output composition puzzle: a difference in the monetary transmission mechanism in the euro area and U.S.

Mojon, Benoît; Angeloni, Ignazio; Terlizzese, Daniele; … - European Central Bank - 2003

output changes. In the euro area investment is the predominant driver of output changes, while in the U.S. consumption shifts … investment, as the proximate cause for this fact, the source of the consumption difference remains a puzzle. JEL Classification …

Persistent link: https://www.econbiz.de/10005070380

Productivity shocks, budget deficits and the current account

Bussière, Matthieu; Fratzscher, Marcel; Müller, Gernot J. - European Central Bank - 2005

Currently the U.S. is experiencing record budget and current account deficits, a phenomenon familiar from the "Twin Deficits" discussion of the 1980s. In contrast, during the 1990s productivity growth has been identified as the primary cause of the US current account deficit. We suggest a...

Persistent link: https://www.econbiz.de/10005070392

Does monetary policy have asymmetric effects? A look at the investment decisions of Italian firms

Gaiotti, Eugenio; Generale, Andrea - European Central Bank - 2001

This paper studies the effects of monetary policy on the investment behaviour of various categories of Italian firms … collateral are more affected by monetary policy. In quantitative terms, the difference in the response of investment by different …

Persistent link: https://www.econbiz.de/10005530836