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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
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Sovereign Debt Markets in Turbulent Times : Creditor Discrimination and Crowding-Out Effects
Broner, Fernando - 2013
reallocated from the private to the public sectors, reducing investment and deepening the recessions even further. To account for …. This implies that domestic debt purchases displace productive investment. The model shows that these purchases reduce …
Persistent link: https://www.econbiz.de/10012458985
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Crowding Out Redefined : The Role of Reserve Accumulation
Reinhart, Carmen M. - 2013
It is well understood that investment serves as a shock absorber at the time of crisis. The duration of the drag on … investment, however, is perplexing. For the nine Asian economies we focus on in this study, average investment/GDP is about 6 … between the sustained reserve accumulation and the persistent and significantly lower levels of investment in the region. Put …
Persistent link: https://www.econbiz.de/10012459011
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Stock Volatility and the War Puzzle
Cortes, Gustavo Silva; Vossmeyer, Angela; Weidenmier, … - National Bureau of Economic Research - 2022
U.S. stock volatility is 33 percent lower during wartime and periods of conflict. This is true even for World Wars I and II, which would seemingly increase uncertainty. In a seminal paper, Schwert (1989) identified the "war puzzle" as one of the most surprising facts from two centuries of stock...
Persistent link: https://www.econbiz.de/10013172137
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Public Debt Through the Ages
Eichengreen, Barry - 2019
We consider public debt from a long-term historical perspective, showing how the purposes for which governments borrow have evolved over time. Periods when debt-to-GDP ratios rose explosively as a result of wars, depressions and financial crises also have a long history. Many of these episodes...
Persistent link: https://www.econbiz.de/10012479450
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When Uncle Sam Introduced Main Street to Wall Street : Liberty Bonds and the Transformation of American Finance
Hilt, Eric - 2020
investment banks, stronger local competition between investment banks and commercial banks, and a relative contraction in …
Persistent link: https://www.econbiz.de/10012481251
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Measuring the Output Responses to Fiscal Policy
Auerbach, Alan J. - 2010
A key issue in current research and policy is the size of fiscal multipliers when the economy is in recession. We provide three insights. First, using regime-switching models, we find large differences in the size of spending multipliers in recessions and expansions with fiscal policy being...
Persistent link: https://www.econbiz.de/10012462346
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U.S. War Costs : Two Parts Temporary, One Part Permanent
Edwards, Ryan D. - 2010
Military spending, fatalities, and the destruction of capital, all of which are immediately felt and are often large, are the most overt costs of war. They are also relatively short-lived. The costs of war borne by combatants and their caretakers, which includes families, communities, and the...
Persistent link: https://www.econbiz.de/10012462548
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Identifying Government Spending Shocks : It's All in the Timing
Ramey, Valerie A. - 2009
Do shocks to government spending raise or lower consumption and real wages? Standard VAR identification approaches show a rise in these variables, whereas the Ramey-Shapiro narrative identification approach finds a fall. I show that a key difference in the approaches is the timing. Both...
Persistent link: https://www.econbiz.de/10012463185
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Macroeconomic Effects from Government Purchases and Taxes
Barro, Robert J. - 2009
GDP, mainly investment, but also non-defense government purchases and net exports. Consumer expenditure on non …
Persistent link: https://www.econbiz.de/10012463281