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Fukui, Masao; Gormsen, Niels; Huber, Kilian - National Bureau of Economic Research - 2024

We show that firms' nominal required returns to capital (i.e., their discount rates) are sticky with respect to expected inflation. Such nominally sticky discount rates imply that increases in expected inflation directly lower firms' real discount rates and thereby raise real investment. We...

Persistent link: https://www.econbiz.de/10014512092

Monetary Policy without Moving Interest Rates : The Fed Non-Yield Shock

Boehm, Christoph E.; Kroner, T. Niklas - National Bureau of Economic Research - 2024

-announcement times. We use a heteroskedasticity-based procedure to estimate a "Fed non-yield shock", which is orthogonal to yield changes … and is identified from excess volatility in the S&P 500 and various dollar exchange rates. A positive non-yield shock …-yield shock is essentially uncorrelated with previous monetary policy shocks and its effects are large in comparison. Its strong …

Persistent link: https://www.econbiz.de/10014576665

Capital Controls, Global Liquidity Traps and the International Policy Trilemma

Devereux, Michael B. - 2013

The 'International Policy Trilemma' refers to the constraint on independent monetary policy that is forced on a country which remains open to international financial markets and simultaneously pursues an exchange rate target. This paper shows that, in a global economy with open financial...

Persistent link: https://www.econbiz.de/10012459570

The Macroeconomic Implications of a Key Currency

Canzoneri, Matthew - 2008

What are the macroeconomic consequences of the dominant role of the dollar in the international monetary system? Here, we present a calibrated two country model in which exports are invoiced in the key currency, and government bonds denominated in the key currency are held internationally to...

Persistent link: https://www.econbiz.de/10012464405

Welfare and Macroeconomic Interdependence

Corsetti, Giancarlo - 1997

The paper develops a simple choice-theoretic model suitable for carrying out welfare" analyses of the international transmission of monetary and fiscal policies. The model can be" solved in closed form and illustrated in terms of the simplest graphical apparatus provide the analysis of...

Persistent link: https://www.econbiz.de/10012472506

Global Hegemony and Exorbitant Privilege

Pflueger, Carolin E.; Yared, Pierre - National Bureau of Economic Research - 2024

We present a dynamic two-country model in which military spending, geopolitical risk, and government bond prices are jointly determined. The model is consistent with three empirical facts: hegemons have a funding advantage, this advantage rises with geopolitical tensions, and war losers suffer...

Persistent link: https://www.econbiz.de/10015056136

Productivity Spillovers, Terms of Trade and the "Home Market Effect"

Corsetti, Giancarlo - 2005

This paper analyzes the welfare implications of international spillovers related to productivity gains, changes in market size, or government spending. We introduce trade costs and endogenous varieties in a two-country general-equilibrium model with monopolistic competition, drawing a...

Persistent link: https://www.econbiz.de/10012467520

The International Transmission of Credit Bubbles : Theory and Policy

Ventura, Jaume - 2015

propagated abroad. In previous work, we built on the theory of rational bubbles to develop a framework to think about the origins …

Persistent link: https://www.econbiz.de/10012457733

Banks, Sovereign Debt and the International Transmission of Business Cycles

Guerrieri, Luca - 2012

This paper studies the international propagation of sovereign debt default. We posit a two-country economy where capital constrained banks grant loans to firms and invest in bonds issued by the domestic and the foreign government. The model economy is calibrated to data from Europe, with the two...

Persistent link: https://www.econbiz.de/10012460358

Central Banks, Stock Markets, and the Real Economy

Caballero, Ricardo J.; Simsek, Alp - National Bureau of Economic Research - 2024

This article summarizes empirical research on the interaction between monetary policy and asset markets, and reviews our previous theoretical work that captures these interactions. We present a concise model in which monetary policy impacts the aggregate asset price, which in turn influences...

Persistent link: https://www.econbiz.de/10014468253

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