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Persistent link: https://www.econbiz.de/10005537685
An exchange rate model with heterogeneous expectations is developed in which agents are subject to mutual mimetic contagion in their portfolio decisions. Two alternative sources of heterogeneity are tested in order to explain the short-term dynamics of the euro/dollar since January 1999....
Persistent link: https://www.econbiz.de/10005537763
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In this paper we show that a model featuring durables consumption, weak credibility, and sticky prices can explain many of the stylized facts associated with exchange-rate-based stabilization, including the quantitative variation exhibited by key macroeconomic variables. In standard models, the...
Persistent link: https://www.econbiz.de/10005706225
In the last 20 years the U.S. economy has experienced a strong reduction in the volatility of GDP growth. By some measures it has declined nearly by half. This paper identifies, documents and models the rapid growth of multinational corporations as a source of gradual decline in output and...
Persistent link: https://www.econbiz.de/10005706228
Emerging market financial crises are abrupt and dramatic, usually occurring after a period of high output growth, massive capital flows, and a boom in asset markets. This paper develops an equilibrium asset pricing model with informational frictions in which vulnerability and the crisis itself...
Persistent link: https://www.econbiz.de/10005706247
Existing studies differ significantly on how much terms of trade shocks contribute to output fluctuations. Empirical studies based on VAR analysis find that terms of trade shocks explain less than 10% of output fluctuations while results from calibrated DSGE models suggest a figure of more than...
Persistent link: https://www.econbiz.de/10005706321
We assess the ability of new open economy models to match OECD business cycle data. We adopt a canonical new open economy model with varying degrees of nominal inertia, monopolistic competition and distribution costs and assess the contribution of each facet of this model to help explain jointly...
Persistent link: https://www.econbiz.de/10005706551
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