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Indebted demand
Mian, Atif; Straub, Ludwig; Sufi, Amir - 2020
We propose a theory of indebted demand, capturing the idea that large debt burdens by households and governments lower aggregate demand, and thus natural interest rates. At the core of the theory is the simple yet under-appreciated observation that borrowers and savers differ in their marginal...
Persistent link: https://www.econbiz.de/10012199991
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Italy in the Eurozone
Keuschnigg, Christian; Kirschner, Linda; Kogler, Michael; … - 2020
benign exit from the Eurozone with stable investor expectations could substantially dampen the short-run impact …
Persistent link: https://www.econbiz.de/10012244451
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Speculative eurozone attacks and departure strategies
Homburg, Stefan - 2018
This paper shows that the eurozone payment system does not effectively protect member states from speculative attacks …. TARGET2 cannot inhibit this drain but only protects central bank assets. Evidence presented here suggests that a run on Italy … distributive effects of an orderly eurozone dissolution. …
Persistent link: https://www.econbiz.de/10011931367
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Euro-area fiscal stance : from theory to practical implementation
Bénassy-Quéré, Agnès - 2016
Despite large automatic stabilizers, the performance of the Euro area as a whole in terms of fiscal stabilization is relatively poor. This report argues that a meaningful fiscal stance for the Euro area should rely on the current account as a complement to the output gap, and be coordinated only...
Persistent link: https://www.econbiz.de/10011521835
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Fiscal rules, financial stability and optimal currency areas
De Grauwe, Paul; Foresti, Pasquale - 2015
In this paper we suggest that Eurozone countries face a policy trade-off among: 1) a common rule imposing co … conclude that the intense fiscal rules that have been introduced in the Eurozone after the emergence of the debt crisis reduced …
Persistent link: https://www.econbiz.de/10010533078
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Hypnosis before wake-up call?! : the revival of sovereign credit risk perception in the EMU-crisis
Bordon, Ingo G.; Schmid, Kai D.; Schmidt, Michael - 2014 - This Version: July 2014
This paper qualifies the view of pronounced overpricing of sovereign bonds for the so-called GIIPS countries during the financial crisis. We use annual data for 21 OECD countries from 1980 to 2012. As opposed to related studies, our data set allows us to contrast the pricing of macroeconomic...
Persistent link: https://www.econbiz.de/10010393624
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Structural distortions and decentralized fiscal policies in EMU
Beetsma, Roel; Bovenberg, Ary Lans - 2001
The combination of discretionary monetary policy, labor-market distortions and nominal wage rigidity yields an inflation bias as monetary policy tries to exploit nominal wage contracts to address labour-market distortions Although an inflation target eliminates this inflation bias, it creates a...
Persistent link: https://www.econbiz.de/10011398780
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Is fiscal policy coordination in EMU desirable?
Beetsma, Roel; Debrun, Xavier; Klaassen, Franc - 2001
It is widely argued that Europe's unified monetary policy calls for the international coordination at the fiscal level. We survey the issues involved with such coordination of fiscal policy as a demand management tool and we use a simple model to investigate the circumstances under which...
Persistent link: https://www.econbiz.de/10011400878
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The Euro area periphery sovereigns' fiscal positions and unconventional monetary policy
Hülsewig, Oliver; Scharler, Johann - 2020
We explore the reaction of the euro area periphery sovereigns' fiscal positions to an unconventional monetary policy shock. We estimate panel vector autoregressive (VAR) models over the period 2010-2018, and identify the shock by imposing sign restrictions. Our results suggest that the...
Persistent link: https://www.econbiz.de/10012154910
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Macroeconomic effects of unconventional monetary policy in the Euro area
Peersman, Gert - 2011 - This draft: July 2011
I find that the Eurosystem can stimulate the economy beyond the policy rate by increasing the size of its balance sheet or the monetary base, that is so-called quantitative easing. The transmission mechanism turns out to be different compared to traditional interest rate innovations: (i) whilst...
Persistent link: https://www.econbiz.de/10009303919