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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

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

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

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

The Euro Changeover and Price Adjustments in Italy

Caporale, Guglielmo Maria - 2011

By estimating a staggered price model over the period 1980q1-2010q2, this paper documents that, after the euro changeover, Italian retailers have increased the number of price adjustments, which has translated into a higher inflation rate, with a detrimental effect on the competitiveness of the...

Persistent link: https://www.econbiz.de/10013128041

Flexible Prices and Leverage

D'Acunto, Francesco - 2017

time, which we use in a difference-in-differences strategy. Firms' frequency of price adjustment did not change around the …

Persistent link: https://www.econbiz.de/10012962123

Climate Change and Psychological Adaptation : A Behavioral Environmental Economics Approach

Aronsson, Thomas; Schöb, Ronnie - 2021

Economic models of climate policy (or policies to combat other environmental problems) typically neglect psychological adaptation to changing life circumstances. People may adapt or become more sensitive, to different degrees, to a deteriorated environment. The present paper addresses these...

Persistent link: https://www.econbiz.de/10013315603

Nominal Exchange Rate Flexibility and Real Exchange Rate Adjustment : Evidence from Dual Exchange Rates in Developing Countries

Cheung, Yin-Wong; Lai, Kon S. - 2021

This study investigates whether greater nominal exchange rate flexibility aids real exchange rate adjustment based on … rate produces faster real exchange rate adjustment than the less flexible official rate does. Half-life estimates of … adjustment speeds are obtained from fractional time series analysis. We find no systematic evidence that greater exchange rate …

Persistent link: https://www.econbiz.de/10013318352

Dissecting the PPP Puzzle : The Unconventional Roles of Nominal Exchange Rate and Price Adjustments

Cheung, Yin-Wong; Lai, Kon S.; Bergman, U. Michael - 2021

The conventional view, as expounded by sticky-price models, is that price adjustment determines the PPP reversion rate …. This study examines the mechanism by which PPP deviations are corrected. Nominal exchange rate adjustment, not price … adjustment, is shown to be the key engine governing the speed of PPP convergence. Moreover, nominal exchange rates are found to …

Persistent link: https://www.econbiz.de/10013319983

Macroeconomic Fluctuations in a Stylized DSGE Model with Disequilibrium Dynamics

Van Aarle, Bas - 2012

disequilibrium economics. In this way, richer macroeconomic adjustment dynamics result, as it is not necessary to assume that goods …

Persistent link: https://www.econbiz.de/10013096548

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