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Macroeconomic Fluctuations in a Stylized DSGE Model with Disequilibrium Dynamics
Van Aarle, Bas - 2012
This study develops a stylised DSGE model, that departs in one aspect: it replaces the general equilibrium approach by disequilibrium economics. In this way, richer macroeconomic adjustment dynamics result, as it is not necessary to assume that goods and labour markets continuously clear. The...
Persistent link: https://www.econbiz.de/10013096548
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The Macroeconomic Policy Challenges of Balance Sheet Recession : Lessons from Japan for the European Crisis
Schnabl, Gunther - 2013
The paper compares the boom-and-bust cycles in Japan and Europe with respect to the reasons for excessive booms, the characteristics of the crises, and the (potential) effects of the crisis therapies. As in Japan the consequence of expansionary monetary and fiscal policies is the hysteresis of...
Persistent link: https://www.econbiz.de/10013081055
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Worker Identity, Employment Fluctuations and Stabilization Policy
Lechthaler, Wolfgang; Snower, Dennis J. - 2021
This paper provides a model of “social hysteresis,” whereby long, deep recessions demotivate workers and thereby lead them to change their work ethic. In switching from a pro-work to an anti-work identity, their incentives to seek and retain work fall and consequently their employment...
Persistent link: https://www.econbiz.de/10013315765
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The Role of Fiscal Policy in a Monetary Union : Are National Automatic Stabilizers Effective?
Colciago, Andrea; Muscatelli, Anton; Ropele, Tiziano; … - 2021
We assess the role of national fiscal policies, as automatic stabilizers, within a monetary union. We use a two-country New Keynesian DGE model which incorporates non-Ricardian consumers (as in Gali et al. 2004) and a home bias in the composition of national consumption bundles. We find that...
Persistent link: https://www.econbiz.de/10013317638
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Legislative Restraint in Corporate Bailout Design
Gradstein, Mark - 2018
The aftermath of the recent economic crisis saw the largest U.S. government bailout of corporate entities ever. While the bailout was carried out with the explicit goal of restoring stability, it aroused much controversy and public criticism based on moral hazard concerns as well as the...
Persistent link: https://www.econbiz.de/10012914914
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Automatic Stabilizers and Economic Crisis : US vs. Europe
Dolls, Mathias - 2010
This paper analyzes the effectiveness of the tax and transfer systems in the European Union and the US to act as an automatic stabilizer in the current economic crisis. We find that automatic stabilizers absorb 38 per cent of a proportional income shock in the EU, compared to 32 per cent in the...
Persistent link: https://www.econbiz.de/10013149370
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Labor Mobility and Fiscal Policy in a Currency Union
Baglioni, Angelo S. - 2015
Labor mobility is commonly taken as a property of an optimal currency area. But how does that property affect the outcome of fiscal policies? In our model, we show that perfect (costless) labour mobility is not necessarily welfare improving, since it prevents the national fiscal authorities from...
Persistent link: https://www.econbiz.de/10013029495
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A Vicious Cycle of Manias, Crashes and Asymmetric Policy Responses - An Overinvestment View
Hoffmann, Andreas - 2013
The business cycles theories of Wicksell (1898), Schumpeter (1912), Mises (1912), Hayek (1929, 1935) and Minsky (1986, 1992) explain business cycles by distorted prices on capital markets, buoyant credit expansion and overinvestment. The exuberance during the boom endogenously causes the...
Persistent link: https://www.econbiz.de/10013095338
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The Euro Changeover and Price Adjustments in Italy
Caporale, Guglielmo Maria - 2011
changeover, Italian retailers have increased the number of price adjustments, which has translated into a higher inflation rate …
Persistent link: https://www.econbiz.de/10013128041
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Time Variation in U.S. Wage Dynamics
Hofmann, Boris - 2011
linked to the monetary policy regime. Before and after the "Great Inflation", nominal wages moved in the same direction as … the (required) adjustment of real wages, and in the opposite direction of the price response. During the "Great Inflation … increasing inflation volatility. Using a standard DSGE model, we show that these stylized facts, in particular the estimated …
Persistent link: https://www.econbiz.de/10013131601