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Market Deregulation and Optimal Monetary Policy in a Monetary Union
Cacciatore, Matteo - 2013
The wave of crises that began in 2008 reheated the debate on market deregulation as a tool to improve economic performance. This paper addresses the consequences of increased flexibility in goods and labor markets for the conduct of monetary policy in a monetary union. We model a two-country...
Persistent link: https://www.econbiz.de/10012459637
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Insulation Impossible : Fiscal Spillovers in a Monetary Union
Cooper, Russell - 2009
This paper studies fiscal spillovers in a monetary union. The focus of the analysis is on the interaction between the fiscal policy of member countries (regions) and the central monetary authority. When capital markets are integrated, the fiscal policy of one country will influence equilibrium...
Persistent link: https://www.econbiz.de/10012463473
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Beware the Side Effects : Capital Controls, Trade, Misallocation and Welfare
Andreasen, Eugenia; Bauducco, Sofía; Dardati, Evangelina; … - National Bureau of Economic Research - 2023
We show that capital controls have large adverse effects on misallocation, exports and welfare using a dynamic Melitz-OLG model with heterogeneous firms, monopolistic competition, endogenous trade participation and collateral constraints. Static effects increase misallocation by reducing...
Persistent link: https://www.econbiz.de/10014226160
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Dynamic Seigniorage Theory : An Exploration
Obstfeld, Maurice - 1989
inflation rate each period in a discretionary manner. One way to view the model is as a synthesis of the "tax-smoothing" theory …This paper shows that the optimal extraction of seigniorage implies a strong tendency for inflation to fall over time … of government deficits, which predicts that the inflation tax follows approximately a martingale, and of models of …
Persistent link: https://www.econbiz.de/10012476187
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Zoomers and Boomers : Asset Prices and Intergenerational Inequality
Farmer, Leland; Farmer, Roger E. A. - National Bureau of Economic Research - 2022
We construct a perpetual youth DSGE model with aggregate un- certainty in which there are dynamically complete markets and agents have Epstein-Zin preferences. We prove that, when endowments have a realistic hump-shaped age-profile, our model has three steady-state equilibria. One of these...
Persistent link: https://www.econbiz.de/10013388774
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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
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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
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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
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Long-Run Determinants of Inflation Differentials in a Monetary Union
Altissimo, Filippo - 2005
This paper analyzes the long-run determinants of inflation differentials in a monetary union. First, we aim at …some stylized facts relating the regional dispersion in headline inflation rates in the euro area as well as in the …-traded sector as the primary cause of price and inflation differentials, with shocks to productivity in the traded sector being …
Persistent link: https://www.econbiz.de/10012467206
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Coordination and Crisis in Monetary Unions
Aguiar, Mark - 2014
common monetary authority chooses inflation for the union, also without commitment. We first describe the existence of a … wisdom that all countries should prefer a union with low-debt members, as such a union can credibly deliver low inflation …
Persistent link: https://www.econbiz.de/10012458389