Bank managers often claim that equity is expensive relative to debt, which contradicts the Modigliani …-Miller irrelevance theorem. This paper combines dividend signalling theories and the Diamond-Dybvig bank run model. An opaque bank must … the bank. The more equity has been issued, the more liquidations are needed during bad times to pay the expected dividend …

On 3 July 2015, SUERF organized its sixth joint conference with the Bank of Finland in Helsinki on the subject of …

of the two. We compare the accounting definition of deficit with the economic definition which takes inflation into …

supply shocks, which are orthogonal to each other. Monetary policy is conducted by an independent central bank that will … optimise. Under discretionary monetary policy the size of the inflation bias depends on the fiscal policy regime. Using the … with the alternative fiscal policy rules, and inflation and output persistence reflects the economic data. With the deficit …

This paper deals with the interaction of fiscal and monetary policy when the central bank is pursuing a price stability …

We investigate both the rational explosive inflation paths studied by McCallum (2001) and the classification of fiscal …

Most of the papers in the sticky-price literature are based on a log-linearization around the zero inflation steady … state, a simplifying but counterfactual assumption. This paper shows that when trend inflation is considered, both the long … results obtained by models log-linearized around a zero inflation steady state are quite misleading. Furthermore, the same is …

results in more persistent inflation as well as output responses to shocks, than without the supply-side channel. We also … discuss the different monetary and fiscal policy regimes and their implication on the stability of inflation and output. …