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Optimal Time-Consistent Fiscal Policy with Uncertain Lifetimes

Calvo, Guillermo A.; Obstfeld, Maurice - 2021

This paper studies optimal fiscal policy in an economy where heterogeneous agents with uncertain lifetimes coexist. We show that some plausible social welfare functions lead to time-inconsistent optimal plans, and we suggest restrictions on social preferences that avoid the problem. The...

Persistent link: https://www.econbiz.de/10013229006

Risk and Exchange Rates

Obstfeld, Maurice; Rogoff, Kenneth - 2021

a sticky-price alternative to Lucas's (1982) exchage rate risk premium model. We show that the level risk premium' in …

Persistent link: https://www.econbiz.de/10013232899

Saving, Investment, and Gold : A Reassessment of Historical Current Account Data

Jones, Matthew T.; Obstfeld, Maurice - 2021

This paper revises pre-World War II current account data for thirteen countries by treating gold flows on a consistent basis. The standard historical data sources often fail to distinguish between monetary gold exports, which are capital-account credits, and nonmonetary gold exports, which are...

Persistent link: https://www.econbiz.de/10013243431

Monetary and Fiscal Remedies for Deflation

Auerbach, Alan J. - 2011

Prevalent thinking about liquidity traps suggests that the perfect substitutability of money and bonds at a zero short-term nominal interest rate renders open-market operations ineffective for achieving macroeconomic stabilization goals. In an earlier paper, we showed that this reasoning does...

Persistent link: https://www.econbiz.de/10013133109

Ruling Out Nonstationary Speculative Bubbles

Obstfeld, Maurice - 2008

There is a large and growing empirical literature that tests forthe existence of asset-price bubbles or quot;sunspotquot; equilibria -- equilibria unrelated to market fundamentals. Our view is that even tests for non-stationary asset-price bubbles should not be interpreted as such. In the...

Persistent link: https://www.econbiz.de/10012774699

Dynamic Seigniorage Theory : an Exploration

Obstfeld, Maurice - 2008

;tax-smoothingquot; theory of government deficits, which predicts that the inflation tax follows approximately a martingale, and of models of …

Persistent link: https://www.econbiz.de/10012774830

Pricing-to-Market, the Interest-Rate Rule, and the Exchange Rate

Obstfeld, Maurice - 2010

may also enhance international risk sharing …

Persistent link: https://www.econbiz.de/10012760533

How Integrated are World Capital Markets? Some New Tests

Obstfeld, Maurice - 2010

between consumption on different dates. If residents of different countries have access to a nominally risk-free bond …

Persistent link: https://www.econbiz.de/10012762931

Intrinsic Bubbles : the Case of Stock Prices

Froot, Kenneth - 2009

Several puzzling aspects of the behavior of United States stock prices can be explained by the presence of a specific type of rational bubble that depends exclusively on dividends. We call such bubbles quot;intrinsicquot; bubbles because they derive all of their variability from exogenous...

Persistent link: https://www.econbiz.de/10012767840

Covered Interest Parity Deviations : Macrofinancial Determinants

Cerutti, Eugenio - 2019

parity (CIP) deviations in the decade after the Global Financial Crisis. Changes in a number of risk- and policy … intermediaries' risk-taking capacity are strongly correlated with the cross-currency basis (the deviation from CIP), and the close … deviations, central bank balance sheets, and term premia. Risk-related factors have more explanatory power than monetary policy …

Persistent link: https://www.econbiz.de/10012865278