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Entry costs and the macroeconomy
Gutiérrez Gallardo, Germán; Jones, Callum; Philippon, … - 2019
We combine a structural model with cross-sectional micro data to identify the causes and consequences of rising concentration in the US economy. Using asset prices and industry data, we estimate realized and anticipated shocks that drive entry and concentration. We validate our approach by...
Persistent link: https://www.econbiz.de/10012154591
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The costs of macroprudential deleveraging in a liquidity trap
Chen, Jiaqian; Finocchiaro, Daria; Lindé, Jesper; … - 2020
We examine the effects of various borrower-based macroprudential tools in a New Keynesian environment where both real and nominal interest rates are low. Our model features long-term debt, housing transaction costs and a zero-lower bound constraint on policy rates. We find that the long-term...
Persistent link: https://www.econbiz.de/10012251966
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Precautionary Savings and Global Imbalances in World General Equilibrium
Sandri, Damiano - 2011
In this paper we assess the implications of precautionary savings for global imbalances by considering a world economy … assumed to differ only with respect to GDP volatility which is calibrated based on the 1980-2008 period. The model predicts a … asset holdings. While heterogeneity in GDP volatility may lead to large imbalances in international investment positions …
Persistent link: https://www.econbiz.de/10014399356
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Precautionary Savings in the Great Recession
Mody, Ashoka - 2012
lower consumption and GDP growth. Consistent with a model of precautionary savings in the face of uncertainty, we find for a … panel of advanced economies that greater labor income uncertainty is significantly associated with higher household savings … precautionary savings motive …
Persistent link: https://www.econbiz.de/10014396946
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Labor force participation and monetary policy in the wake of the Great Recession
Erceg, Christopher J.; Levin, Andrew T. - 2013
In this paper, we provide compelling evidence that cyclical factors account for the bulk of the post-2007 decline in the U.S. labor force participation rate. We then proceed to formulate a stylized New Keynesian model in which labor force participation is essentially acyclical during “normal...
Persistent link: https://www.econbiz.de/10012667415
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Enabling deep negative rates to fight recessions : a guide
Agarwal, Ruchir; Kimball, Miles S. - 2019
The experience of the Great Recession and its aftermath revealed that a lower bound on interest rates can be a serious obstacle for fighting recessions. However, the zero lower bound is not a law of nature; it is a policy choice. The central message of this paper is that with readily available...
Persistent link: https://www.econbiz.de/10012019855
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The volatility trap : precautionary saving, investment, and aggregate risk
Cherif, Reda; Hasanov, Fuad - 2012
-or-sow"" model of growth. High volatility of permanent shocks results in high precautionary saving in the safe asset and low … investment, or a ""volatility trap."" Namely, big savers invest relatively little. In contrast, low volatility of permanent … shocks leads to low precautionary saving and high or low investment, depending on the volatility of temporary shocks …
Persistent link: https://www.econbiz.de/10009615558
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The Volatility Trap : Precautionary Saving, Investment, and Aggregate Risk
Cherif, Reda - 2012
-or-sow"" model of growth. High volatility of permanent shocks results in high precautionary saving in the safe asset and low … investment, or a ""volatility trap."" Namely, big savers invest relatively little. In contrast, low volatility of permanent … shocks leads to low precautionary saving and high or low investment, depending on the volatility of temporary shocks …
Persistent link: https://www.econbiz.de/10014396572
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Monetary policy with negative interest rates : decoupling cash from electronic money
Assenmacher-Wesche, Katrin; Krogstrup, Signe - 2018
Monetary policy space remains constrained by the lower bound in many countries, limiting the policy options available to address future deflationary shocks. The existence of cash prevents central banks from cutting interest rates much below zero. In this paper, we consider the practical...
Persistent link: https://www.econbiz.de/10011905923
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Macroeconomic Uncertainty, Precautionary Savings and the Current Account
Ostry, Jonathan David - 1992
incorporate the effects of macroeconomic uncertainty on private savings behavior. It is shown that the greater the uncertainty in … savings and, other things equal, the larger is the current account surplus. Empirical support for the model is found using …
Persistent link: https://www.econbiz.de/10014396005