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Feeding the Tigers : Remittances and Conflict in Sri Lanka
Bonadio, Barthélémy - 2024
subnational level. Using shocks to source country remittance outflows, we show that exogenous increases in remittances accessible … to the Sri Lankan subdistricts over the period of the conflict. Our main quantitative finding is that remittances had a … military strength of the Tamil Tigers than of the government. Remittances that favored the Tamil Tiger rebels may have …
Persistent link: https://www.econbiz.de/10015094904
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Real Exchange Rate Misalignments and Growth
Razin, Ofair - 1997
Real exchange rate (RER) misalignment is now a standard concept in international macroeconomic theory and policy. However, there is neither a consensus indicator of misalignment, nor an agreed upon methodology for constructing such an indicator. This paper constructs an indicator of RER...
Persistent link: https://www.econbiz.de/10012472640
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Macroeconomic Adjustment with Segmented Labor Markets
Agenor, Pierre-Richard - 1994
This paper analyzes the macroeconomic effects of fiscal and labor market policies in a small open developing country. The basic framework considers an economy with a large informal production sector and a heterogeneous work force. The labor market is segmented as a result of efficiency...
Persistent link: https://www.econbiz.de/10012474150
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Optimal Reserves in Financially Closed Economies
Jeanne, Olivier - 2016
Financially closed economies insure themselves against current-account shocks using international reserves. We characterize the optimal management of reserves using an open-economy model of precautionary savings and emphasize several results. First, the welfare-based opportunity cost of reserves...
Persistent link: https://www.econbiz.de/10012456536
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Living with the Trilemma Constraint : Relative Trilemma Policy Divergence, Crises, and Output Losses for Developing Countries
Aizenman, Joshua - 2013
This paper investigates the potential impacts of the degree of divergence in open macroeconomic policies in the context of the trilemma hypothesis. Using an index that measures the relative policy divergence among the three trilemma policy choices, namely monetary independence, exchange rate...
Persistent link: https://www.econbiz.de/10012459214
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International Reserve Management under Rollover Crises
Barbosa-Alves, Mauricio; Bianchi, Javier; Sosa Padilla, … - National Bureau of Economic Research - 2024
This paper develops a framework to study the management of international reserves when a government faces the risk of a rollover crisis. In the model, it is optimal for the government to reduce its vulnerability by initially lowering debt, and then increasing both debt and reserves as it...
Persistent link: https://www.econbiz.de/10014544672
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Trade Wars and the Optimal Design of Monetary Rules
Auray, Stéphane; Devereux, Michael B.; Eyquem, Aurélien - National Bureau of Economic Research - 2024
Monetary rules may have a large effect on the outcome of trade wars if central banks target the CPI inflation rate or more generally changes in the relative price of traded goods. We lay out a two-country open-economy model with sticky prices where countries engage in trade wars. In the presence...
Persistent link: https://www.econbiz.de/10014544729
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How Can Asset Prices Value Exchange Rate Wedges?
Lewis, Karen K.; Liu, Edith - National Bureau of Economic Research - 2022
When available financial securities allow investors to optimally diversify risk across countries, standard theory implies that exchange rates should reflect this behavior. However, exchange rates observed in the data deviate from these predictions. In this paper, we develop a framework to value...
Persistent link: https://www.econbiz.de/10013388777
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Excess Savings and Twin Deficits : The Transmission of Fiscal Stimulus in Open Economies
Aggarwal, Rishabh; Auclert, Adrien; Rognlie, Matthew; … - National Bureau of Economic Research - 2022
We study the effects of debt-financed fiscal transfers in a general equilibrium, heterogeneous-agent model of the world economy. In the long run, increases in government debt anywhere raise the world interest rate and increase private wealth everywhere. In the short run, a country with a...
Persistent link: https://www.econbiz.de/10013334403
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Exchange Controls As A Fiscal Instrument
Schmitt-Grohé, Stephanie; Uribe, Martín - National Bureau of Economic Research - 2023
About 20 percent of countries have in place dual, multiple, or parallel exchange rates. Exchange controls represent a form of distortionary commercial policy. We show that they can also deflate the real value of external public debt. We study an optimal taxation problem of a government with...
Persistent link: https://www.econbiz.de/10014322682