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Distributional Incentives in an Equilibrium Model of Domestic Sovereign Default
Mendoza, Enrique G.; D'Erasmo, Pablo - National Bureau of Economic Research (NBER) - 2013
The European debt crisis shares features of the historical episodes of outright default on domestic public debt … default in which a government chooses debt and default optimally, responding to distributional incentives affecting the … welfare of risk-averse agents who are heterogeneous in wealth. Equilibria with debt do not exist if the government is …
Persistent link: https://www.econbiz.de/10010969420
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Fiscal Policy and Unemployment
Battaglini, Marco; Coate, Stephen - National Bureau of Economic Research (NBER) - 2011
costly, but can be financed by issuing government debt. In the context of this model, the paper analyzes the simultaneous …
Persistent link: https://www.econbiz.de/10009359915
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Nominal versus Indexed Debt: A Quantitative Horse Race
Alfaro, Laura; Kanczuk, Fabio - National Bureau of Economic Research (NBER) - 2007
The main arguments in favor and against nominal and indexed debt are the incentive to default through inflation versus … dynamic equilibrium model with tax distortion, government outlays uncertainty, and contingent-debt service. Our framework also … recognizes that contingent debt can be associated with incentive problems and lack of commitment. Thus, the benefits of …
Persistent link: https://www.econbiz.de/10005713973
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Macroeconomics With Heterogeneity: A Practical Guide
Guvenen, Fatih - National Bureau of Economic Research (NBER) - 2011
This article reviews macroeconomic models with heterogeneous households. A key question for the relevance of these models concerns the degree to which markets are complete. This is because the existence of complete markets imposes restrictions on (i) how much heterogeneity matters for aggregate...
Persistent link: https://www.econbiz.de/10009372433
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Explaining the Effects of Government Spending Shocks on Consumption and the Real Exchange Rate
Ravn, Morten; Schmitt-Grohé, Stephanie Schmitt-Grohe; … - National Bureau of Economic Research (NBER) - 2007
Using panel structural VAR analysis and quarterly data from four industrialized countries, we document that an increase in government purchases leads to an expansion in output and private consumption, a deterioration in the trade balance, and a depreciation of the real exchange rate (i.e., a...
Persistent link: https://www.econbiz.de/10005830703
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On the Timing and Efficiency of Creative Destruction
Caballero, Ricardo J; Hammour, Mohamad L. - National Bureau of Economic Research (NBER) - 1994
This paper analyzes the timing, pace and efficiency of the on- going job reallocation that results from product and process innovation. There are strong reasons why an efficient economy ought to concentrate both job creation and destruction during cyclical downturns, when the opportunity cost of...
Persistent link: https://www.econbiz.de/10005775194
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The Heterogeneous State of Modern Macroeconomics: A Reply to Solow
Chari, Varadarajan; Kehoe, Patrick J. - National Bureau of Economic Research (NBER) - 2007
Robert Solow has criticized our 2006 Journal of Economic Perspectives essay describing "Modern Macroeconomics in Practice." Solow eloquently voices the commonly heard complaint that too much macroeconomic work today starts with a model with a single type of agent. We argue that modern...
Persistent link: https://www.econbiz.de/10005778451
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Efficient Bailouts?
Bianchi, Javier - National Bureau of Economic Research (NBER) - 2012
This paper develops a non-linear DSGE model to assess the interaction between ex-post interventions in credit markets and the build-up of risk ex ante. During a systemic crisis, bailouts relax balance sheet constraints and mitigate the severity of the recession. Ex ante, the anticipation of such...
Persistent link: https://www.econbiz.de/10010595764
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Cyclical Unemployment, Structural Unemployment
Diamond, Peter A. - National Bureau of Economic Research (NBER) - 2013
Whenever unemployment stays high for an extended period, it is common to see analyses, statements, and rebuttals about the extent to which the high unemployment is structural, not cyclical. This essay views the Beveridge Curve pattern of unemployment and vacancy rates and the related matching...
Persistent link: https://www.econbiz.de/10010821745
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The Labor Market Four Years Into the Crisis: Assessing Structural Explanations
Rothstein, Jesse - National Bureau of Economic Research (NBER) - 2012
Four years after the beginning of the Great Recession, the labor market remains historically weak. Many observers have concluded that "structural" impediments to recovery bear some of the blame. This paper reviews such structural explanations. I find that there is little evidence supporting...
Persistent link: https://www.econbiz.de/10011188535