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Current account adjustment in EU countries : does euro-area membership make a difference?

Herrmann, Sabine; Jochem, Axel - 2013

The paper evaluates current account dynamics in countries with different exchange rate regimes within the EU. In this, the empirical analysis explicitly differentiates between countries with a flexible and a fixed exchange rate regime and members of a monetary union. In addition, we model the...

Persistent link: https://www.econbiz.de/10010211960

Sovereign risk, interbank freezes, and aggregate fluctuations

Engler, Philipp; Große Steffen, Christoph - 2014

This paper studies the bank-sovereign link in a dynamic stochastic general equilibrium set-up with strategic default on public debt. Heterogeneous banks give rise to an interbank market where government bonds are used as collateral. A default penalty arises from a breakdown of interbank...

Persistent link: https://www.econbiz.de/10010457126

Doing more with less : the catalytic function of IMF lending and the role of program size

Krahnke, Tobias - 2020

Financial assistance provided by the International Monetary Fund (IMF) is supposed to unlock other financing, acting as … neglect of the size of an IMF program. Applying a novel identification strategy to account for endogenous selection into … effect of IMF financial assistance is weakened - and potentially reversed - if the size of a program exceeds a certain level …

Persistent link: https://www.econbiz.de/10012197872

Selective default expectations

Accominotti, Olivier; Albers, Thilo N. H.; Oosterlinck, Kim - 2023

This paper explores how selective default expectations affect the pricing of sovereign bonds in a historical laboratory: the German default of the 1930s. We analyze yield differentials between identical government bonds traded across various creditor countries before and after bond market...

Persistent link: https://www.econbiz.de/10014495920

Optimal sovereign default

Adam, Klaus; Grill, Michael - 2013

When is it optimal for a government to default on its legal repayment obligations? We answer this question for a small open economy with domestic production risk in which contracting frictions make it optimal for the government to finance itself by issuing non-contingent debt. We show that...

Persistent link: https://www.econbiz.de/10009733001

The fiscal footprint of macroprudential policy

Reis, Ricardo - 2020

Monetary policy leaves a fiscal footprint. In some circumstances, relieving the fiscal burden becomes the main goal of policy, and inflation control is subordinate. This article notes that the same is true of macroprudential policy, and it characterizes the size and sign of its fiscal footprint,...

Persistent link: https://www.econbiz.de/10012222608

The macroeconomic effects of large exchange rate appreciations

Kappler, Marcus; Reisen, Helmut; Schularick, Moritz; … - 2011

In this paper we study the macroeconomic effects of large exchange rate appreciations. Using a sample of 128 countries from 1960-2008, we identify large nominal and real appreciations shocks and study their macroeconomic effects in a dummy-augmented panel autoregressive model. Our results show...

Persistent link: https://www.econbiz.de/10008905965

Asymmetric credit growth and current account imbalances in the euro area

Unger, Robert - 2015

The euro area crisis is often linked to the emergence of current account imbalances. As most of the deficit countries experienced pronounced credit booms at the same time that these imbalances were building up, this paper investigates the link between domestic credit developments and the current...

Persistent link: https://www.econbiz.de/10011373649

The expectations-driven US current account

Hoffmann, Mathias; Krause, Michael; Laubach, Thomas - 2013

Since 1991, survey expectations of long-run output growth for the U.S. relative to the rest of the world exhibit a pattern strikingly similar to that of the U.S. current account, and thus also to global imbalances. We show that this finding can to a large extent be rationalized in a two-region...

Persistent link: https://www.econbiz.de/10009732995

Monetary policy and the current account : theory and evidence

Hjortsoe, Ida; Weale, Martin; Wieladek, Tomasz - 2016

Does the current account improve or deteriorate following a monetary policy expansion? We examine this issue theoretically and empirically. We show that a standard open economy DSGE model predicts that the current account response to a monetary policy shock depends on the degree of economic...

Persistent link: https://www.econbiz.de/10011436615