The present paper uses a two-country stochastic general equilibrium model assuming incomplete financial markets and non-separable consumer preferences to show how optimal fiscal responses to an asymmetric productivity shock can mitigate the worsening of the international consumption risk sharing...

This paper analyzes empirically the linkages between trade openness, economic growth, and the size of the informal economy. I employ panel VAR techniques in a quarterly panel data set composed of 12 advanced economies over the period from 1964:1 to 2010:4 allowing bi-directional interaction...

This paper examines the functional form of the impossible trinity hypothesis for five selected countries in the Asian and Pacific regions including Australia, Japan, New Zealand, Singapore and South Korea. The linear, log-log and semi-log forms are compared. Based on the mean absolute percent...

Applying the autoregressive distributed lag model, this paper examines whether different exchange rate arrangements may affect monetary autonomy. In the short run, all the countries have moderate or significant monetary autonomy due to partial or small adjustments. In the long run, Hong Kong,...

We analyze the relation between interest-rate controls and equilibrium determinacy in a two-country model in which money is employed as a factor of production. Given this specification, holding cash generates an opportunity cost. Therefore, equilibrium can be indeterminate even if both countries...

This paper proposes a theoretical growth model where seigniorage can be used to finance productive public spending, and show the existence of nonlinear effects between seigniorage and economic growth. Empirical evidence based on panel regression techniques provides some support for these...

This paper analyses the impact of monetary and fiscal policies' interaction on the financial stability of the eurozone. Based on the construction of a financial stability index for the entire euro area, we assess the impact in terms of the stability of different configurations of policy-mix...

This paper proposes a theoretical growth model where seigniorage can be used to finance productive public spending, and show the existence of nonlinear effects between seigniorage and economic growth. Empirical evidence based on panel regression techniques provides some support for these...

This article develops an OLG model with random relocations of agents among more-than-two islands, wherein asymmetric liquidity shocks are observed. The model exhibits suboptimality of the Friedman rule. Furthermore, it is shown that there is no room for monetary policy to improve social welfare...

The subsidiarity principle governing the collection of statistical data in the EMU may cause asymmetrical information. The national governments may be tempted to distort their economic and financial data communicated to ECB in order to influence its monetary policy decisions. We base our...