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Monetary Policy, Bounded Rationality, and Incomplete Markets

Farhi, Emmanuel - 2017

This paper extends the benchmark New-Keynesian model with a representative agent and rational expectations by introducing two key frictions: (1) agent heterogeneity with incomplete markets, uninsurable idiosyncratic risk, and occasionally-binding borrowing constraints; and (2) bounded...

Persistent link: https://www.econbiz.de/10012455400

Determinants of Long-Term Growth : A Bayesian Averaging of Classical Estimates (BACE) Approach

Doppelhofer, Gernot - 2000

This paper examines the robustness of explanatory variables in cross-country economic growth regressions. It employs a novel approach, Bayesian Averaging of Classical Estimates (BACE), which constructs estimates as a weighted average of OLS estimates for every possible combination of included...

Persistent link: https://www.econbiz.de/10012471000

Capital Controls and Financial Crises

Aizenman, Joshua - 1999

The purpose of this paper is to explain the reluctance of developing countries to open up their capital market to foreigners, and the conditions inducing an emerging market economy to switch its policies. We consider an economy characterized initially by a one-sided openness to the capital...

Persistent link: https://www.econbiz.de/10012471387

Social Security in Theory and Practice (I) : Facts and Political Theories

Mulligan, Casey B. - 1999

166 countries have some kind of public old age pension. What economic forces create and sustain old age Social Security as a public program? We document some of the internationally and historically common features of Social Security programs including explicit and implicit taxes on labor supply,...

Persistent link: https://www.econbiz.de/10012471676

Capital Flows, the Current Account, and the Real Exchange Rate : Consequences of Liberalization and Stabilization

Obstfeld, Maurice - 1984

This paper develops a dynamic framework in which macroeconomic liberalization and stabilization measures of the type recently seen in Latin America can be studied. The model is sufficiently general to cover both polar cases of a closed capital account and free private capital mobility, so the...

Persistent link: https://www.econbiz.de/10012477560

Tariff Liberalization Policy and Financial Restrictions

Aizenman, Joshua - 1983

The purpose of this paper is to assess how restrictions on capital mobility affect adjustment to a tariff liberalization policy. This is done by comparing the adlustment process under free and restricted convertibility of foreign assets in a regime where the commercial exchange rate is pegged....

Persistent link: https://www.econbiz.de/10012477844

Covered Interest Parity Deviations : Macrofinancial Determinants

Cerutti, Eugenio M. - 2019

For several decades until the Global Financial Crisis (GFC), Covered Interest Parity (CIP) appeared to hold quite closely--even as a broad macroeconomic relationship applying to daily or weekly data. Not only have CIP deviations significantly increased since the GFC, but potential macrofinancial...

Persistent link: https://www.econbiz.de/10012480075

Crash Risk in Currency Markets

Farhi, Emmanuel - 2009

1996 to 2011 period using exchange rate spot, forward, and option data, we obtain a real-time index of world disaster risk …

Persistent link: https://www.econbiz.de/10012463588

The Real Exchange Rate, Mercantilism and the Learning by Doing Externality

Aizenman, Joshua - 2008

This paper examines the degree to which the learning by doing externality [LBD] calls for an undervalued exchange rate, a policy suggested by recent empirical studies which concluded that mildly undervalued real exchange rate may enhance growth. We obtain mixed results. For an economy where LBD...

Persistent link: https://www.econbiz.de/10012464794

Monetary Sovereignty, Exchange Rates, and Capital Controls : The Trilemma in the Interwar period

Obstfeld, Maurice - 2004

disorder in the world economy. The interwar disorder often is linked to policies inconsistent with the constraint of the open … yield. This historical analytic narrative is compelling with significant ramifications for today's world, if true but … empirically controversial. We apply theory and empirics to the interwar data and find strong support for the logic of the trilemma …

Persistent link: https://www.econbiz.de/10012468300

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