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Weakly non-separable preferences and the Harberger-Laursen-Metzler effect

Ikeda, Shinsuke - In: Canadian Journal of Economics 34 (2001) 1, pp. 290-307

non-separable preferences à la Shi (1994) under endogenous time preference. This enables us to emphasize a welfare change …

Persistent link: https://www.econbiz.de/10005604488

Do tax cuts generate twin deficits? A multi-country analysis

Boileau, Martin; Normandin, Michel - In: Canadian Journal of Economics 45 (2012) 4, pp. 1667-1699

We study the effects of tax shocks on the budget and external deficits for 16 industrialized countries over the post-1970 period. Our structural approach is based on a small open economy model where a tax cut affects the external deficit by two distinct channels. The demographic channel works...

Persistent link: https://www.econbiz.de/10010587968

Price rigidity, the mark-up, and the dynamics of the current account

Lombardo, Giovanni - In: Canadian Journal of Economics 35 (2002) 3, pp. 531-555

The degree of competition affects the current account response to nominal shocks. The mechanism hinges on the relationship between the mark-up and the degree of real rigidity of prices. In a model with intermediate goods, the degree of real rigidity increases in the mark-up. A weaker response of...

Persistent link: https://www.econbiz.de/10005111407

Capital utilization and habit formation in a small open economy model

Letendre, Marc-André - In: Canadian Journal of Economics 37 (2004) 3, pp. 721-741

This paper shows the effects of endogenous capital utilization and habit formation in consumption on the predictions of a small open economy model calibrated to Canada. Capital utilization improves the fit of the model by increasing the volatility of output, investment, and hours worked, while...

Persistent link: https://www.econbiz.de/10005770606

Fertility and the real exchange rate

Rose, Andrew K.; Supaat, Saktiandi; Braude, Jacob - In: Canadian Journal of Economics 42 (2009) 2, pp. 496-518

We use a quinquennial data set covering 87 countries between 1975 and 2005 to investigate empirically the relationship between fertility and the real effective exchange rate. Theoretically, a country experiencing a decline in its fertility rate can be expected to experience a real depreciation....

Persistent link: https://www.econbiz.de/10005000409

Endogenous inflows of speculative capital and the optimal currency appreciation path

Li, Mei; Qiu, Junfeng - In: Canadian Journal of Economics 44 (2011) 1, pp. 364-379

This paper examines the optimal appreciation path of an undervalued currency in the presence of speculative capital inflows that are endogenously affected by the appreciation path. A central bank decides its appreciation policy based on three costs: (i) misalignment costs associated with the gap...

Persistent link: https://www.econbiz.de/10008835067

A dynamic small open economy model with involuntary unemployment

Janko, Zuzana - In: Canadian Journal of Economics 44 (2011) 4, pp. 1350-1368

(1988) preferences to match the countercyclical trade balance observed in open economies, as well as other second moments …, while standard preferences à la King, Plosser, and Rebelo (1988) are commonly labelled `ineffective,' owing to their … inability to yield the countercyclical trade balance. In this paper, I show that an SOE model with standard preferences and …

Persistent link: https://www.econbiz.de/10009369282

International business cycles and the relative price of investment goods

Basu, Parantap; Thoenissen, Christoph - In: Canadian Journal of Economics 44 (2011) 2, pp. 580-606

Is the relative price of investment goods a good proxy for investment specific technology? We model this relative price in a flexible price international economy with two fundamental shocks, namely, the total factor productivity (TFP) shock and the investment-specific technology (IST) shock. We...

Persistent link: https://www.econbiz.de/10009201002

Risk aversion, exchange-rate uncertainty, and the law of one price: insights from the market for online air-travel tickets

Arghyrou, Michael G.; Gregoriou, Andros; Pourpourides, … - In: Canadian Journal of Economics 44 (2011) 3, pp. 880-906

We argue that risk aversion driven by exchange-rate uncertainty causes a wedge between the domestic and foreign prices of a homogeneous good. We test our hypothesis using a unique micro-data set from a market with minimum imperfections. The empirical findings validate our hypothesis, as...

Persistent link: https://www.econbiz.de/10009201023

Dollarization and the inflation threshold

Antinolfi, Gaetano; Landeo, Claudia M.; Nikitin, Maxim - In: Canadian Journal of Economics 40 (2007) 2, pp. 628-649

Empirical evidence suggests non-linearity in the impact of inflation on financial intermediation and real activity. Evidence also suggests that high inflation affects financial intermediation through the substitution of dollars `under the mattress' for savings in domestic banks. We model an...

Persistent link: https://www.econbiz.de/10005111403

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