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Is numérairology the future of monetary economics?: unbundling numéraire and medium of exchange through a virtual currency and a shadow exchange rate
Buiter, Willem H. - London School of Economics (LSE) - 2007
The paper discusses some fundamental problems in monetary economics associated with the determination and role of the numéraire. The issues are introduced by formalising a proposal, attributed to Eisler, to remove the zero lower bound on nominal interest rates by unbundling the numéraire and...
Persistent link: https://www.econbiz.de/10010745586
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The elusive costs and the immaterial gains of fiscal constraints
Canova, Fabio; Pappa, Evi - London School of Economics (LSE) - 2004
We study whether fiscal restrictions affect volatilities and correlations of macrovariables and the probability of excessive debt for a sample of 48 US states. Fiscal constraints are characterized with a number of indicators and volatility and correlations are computed in several ways. The...
Persistent link: https://www.econbiz.de/10010745871
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Sales and monetary policy
Guimaraes, Bernardo; Sheedy, Kevin D. - London School of Economics (LSE) - 2008
A striking fact about prices is the prevalence of ``sales'': large temporary price cuts followed by a return exactly to the former price. This paper builds a macroeconomic model with a rationale for sales based on firms facing consumers with different price sensitivities. Even if firms can vary...
Persistent link: https://www.econbiz.de/10010746197
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Does it cost to be virtuous? The macroeconomic effects of fiscal constraints
Canova, Fabio; Pappa, Evi - London School of Economics (LSE) - 2005
We study whether and how fiscal restrictions alter the business cycle features of macrovariables for a sample of 48 US states. We also examine the ”typical” transmission properties of fiscal disturbances and the implied fiscal rules of states with different fiscal restrictions. Fiscal...
Persistent link: https://www.econbiz.de/10011071547
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The unemployment volatility puzzle: is wage stickiness the answer?
Pissarides, Christopher - London School of Economics (LSE) - 2007
the model’s failure to match the observed cyclical volatility of unemployment.. Job creation in the model is influenced by … are consistent with the evidence. Therefore explanations of the unemployment volatility puzzle have to preserve the … cyclical volatility of wages. I discuss some extensions of the model that can increase cyclical unemployment volatility through …
Persistent link: https://www.econbiz.de/10010745651
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A risk assessment model for banks
Goodhart, Charles; Sunirand, Pojanart; Tsomocos, … - London School of Economics (LSE) - 2004
The objective of this paper is to propose a model to assess risk for banks. Its main innovation is to incorporate endogenous interaction between banks, recognising that the actual risk to which an individual bank is exposed also depends on its interaction with other banks and other private...
Persistent link: https://www.econbiz.de/10010745460
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Towards a measure of financial fragility
Aspachs, Oriol; Goodhart, Charles; Tsomocos, Dimitrios P.; … - London School of Economics (LSE) - 2006
This paper proposes a measure of financial fragility that is based on economic welfare in a general equilbrium model calibrated against UK data. The model comprises a household sector, three active heterogeneous banks, a central bank/regulator, incomplete markets, and endogenous default. We...
Persistent link: https://www.econbiz.de/10010745512
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A model to analyse financial fragility: applications
Goodhart, Charles; Sunirand, Pojanart; Tsomocos, … - London School of Economics (LSE) - 2004
The purpose of our work is to explore contagious financial crises. To this end, we use simplified, thus numerically solvable, versions of our general model [Goodhart, Sunirand and Tsomocos (2003)]. The model incorporates heterogeneous agents, banks and endogenous default, thus allowing various...
Persistent link: https://www.econbiz.de/10010745587
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Does monetary policy lose effectiveness during a credit crunch?
Bijapur, Mohan - London School of Economics (LSE) - 2010
This article investigates the effectiveness of monetary policy during a credit crunch by estimating a vector autoregression on the US economy. We present evidence that interest rate cuts have a diminished impact on growth, due to impairment in the relationship between monetary policy and the...
Persistent link: https://www.econbiz.de/10011126655
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Unemployment in Britain: a European success story
Pissarides, Christopher - London School of Economics (LSE) - 2003
Unemployment in Britain has fallen from high European-style levels to US levels. I argue that the key reasons are first … an institutional change that reduced inflationary expectations in the face of falling unemployment. The decline of trade …
Persistent link: https://www.econbiz.de/10010928626