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Does U.S. Monetary Policy Respond to Macroeconomic Uncertainty?
Gomez, Thomas; Piccillo, Giulia - 2023
We find that macroeconomic uncertainty plays a significant role in U.S. monetary policy. First, we construct a measure of uncertainty as felt by policymakers at the time of making their rate-setting decisions. This measure is derived from a real-time, Bayesian estimation of a small monetary VAR...
Persistent link: https://www.econbiz.de/10014357029
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Aligning Profit Taxation with Value Creation
Richter, Wolfram F. - 2019
The OECD seeks to align transfer pricing and profit taxation with value creation but fails to provide a clear definition. This paper argues that value creation requires international cooperation and that the profit tax base should therefore be allocated according to standards commonly considered...
Persistent link: https://www.econbiz.de/10012872065
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The Global Effects of COVID-19-Induced Uncertainty
Caggiano, Giovanni - 2020
We estimate a three-variate VAR using proxies of global financial uncertainty, the global financial cycle, and world industrial production to simulate the effects of the jump in financial uncertainty observed in correspondence of the Covid-19 outbreak. We predict the cumulative loss in world...
Persistent link: https://www.econbiz.de/10012834352
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Risk Matters : Breaking Certainty Equivalence
Parra-Alvarez, Juan Carlos - 2020
first-order approximated solution built by perturbation methods accounts for risk. We show that risk matters economically in … a real business cycle (RBC) model with habit formation and capital adjustment costs and that neglecting risk leads to …
Persistent link: https://www.econbiz.de/10012834991
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Bank Bonus Pay as a Risk Sharing Contract
Efing, Matthias - 2019
We argue that risk sharing motivates the bank-wide structure of bonus pay. In the presence of financial frictions that … make external financing costly, the optimal contract between shareholders and employees involves some degree of risk … to rationalize with incentive theories of bonus pay - but support an important risk sharing motive. In particular …
Persistent link: https://www.econbiz.de/10012892088
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Policy Coordination Under Model Disagreement and Uncertainty
Hefeker, Carsten - 2019
What are the incentives for governments to coordinate their policies internationally when there is model disagreement and uncertainty? We build a model where countries disagree on policy targets and how policies affect the economies, and show that uncertainty not only determines the type of...
Persistent link: https://www.econbiz.de/10012892108
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The Optimal Amount of Attention to Capital Income Risk and Heterogeneous Precautionary Saving Behavior
Yin, Penghui - 2019
uninsured capital income risk, and suffer from an information-processing capacity constraint. For given attention devoted to … capital income risk, we solve for the optimal consumption-saving choices and show that the expected welfare is increasing with … capacity, assuming a relative risk aversion degree larger than unity. Furthermore, we solve for attention choice and find that …
Persistent link: https://www.econbiz.de/10012892117
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Uncertainty and the Cost of Bank vs. Bond Finance
Grimme, Christian - 2019
risk of firm default …
Persistent link: https://www.econbiz.de/10012892132
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Low Inflation : High Default Risk and High Equity Valuations
Smarzynska Javorcik, Beata - 2019
asset prices and corporate default risk. Our model includes two empirically grounded nominal frictions: fixed nominal …
Persistent link: https://www.econbiz.de/10012892192
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Uncertainty, Imperfect Information, and Expectation Formation Over the Firms's Life Cycle
Chen, Cheng - 2020
Using a long-panel dataset of Japanese firms that contains firm-level sales forecasts, we provide evidence on firm-level uncertainty and imperfect information over their life cycle. We find that firms make non-negligible and positively correlated forecast errors. However, they make more precise...
Persistent link: https://www.econbiz.de/10012826001