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The impact of FX central bank intervention in a noise trading framework
Beine, Michel; De Grauwe, Paul; Grimaldi, Marianna - 2005
In this paper we investigate the effects of central bank interventions (CBI) in a noise trading model with chartists and fundamentalists. We first estimate a model in which chartists extrapolate past returns and fundamentalists forecast a mean reverting dynamics of the exchange rate towards a...
Persistent link: https://www.econbiz.de/10010261316
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Self-fulfilling crises in the Eurozone: An empirical test
De Grauwe, Paul; Ji, Yuemei - 2012
We test the hypothesis that the government bond markets in the Eurozone are more fragile and more susceptible to self … countries in the Eurozone during 2010-11 was disconnected from underlying increases in the debt to GDP ratios and fiscal space … argue that this can drive member countries of the Eurozone into bad equilibria. We also find evidence that after years of …
Persistent link: https://www.econbiz.de/10010282067
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A fragile Eurozone in search of a better governance
De Grauwe, Paul - 2011
self-fulfilling multiple equilibria arise. I analyze the implications of this fragility for the governance of the Eurozone …
Persistent link: https://www.econbiz.de/10010285539
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A new two-pillar strategy for the ECB
De Grauwe, Paul; Gros, Daniel - 2009
The ECB has been arguing in the past that since there is no trade-off between price stability and financial stability, the pursuit of price stability is the best a central bank can do to also maintain financial stability. We argue that there is a potential trade-off between price stability and...
Persistent link: https://www.econbiz.de/10010266001
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Is monetary policy in the Eurozone less effective than in the US?
De Grauwe, Paul; Storti, Cláudia Costa - 2005
There is a wide consensus that the existence of structural rigidities in the Eurozone reduces the effectiveness of the … monetary policies in the US and the Eurozone countries. This consists in collecting the estimated transmission coefficients …
Persistent link: https://www.econbiz.de/10010276746
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Non-linearities in the relation between the exchange rate and its fundamentals
Altavilla, Carlo; De Grauwe, Paul - 2005
This paper investigates the relationship between the euro-dollar exchange rate and its underlying fundamentals. First, we develop a simple theoretical model in which chartists and fundamentalists interact. This model predicts the existence of different regimes, and thus nonlinearities in the...
Persistent link: https://www.econbiz.de/10010261347