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A Principal-Agent Theory Approach to Public Expenditure Management Systems in Developing Countries

Leruth, Luc E. - 2006

countries using an analytical framework based on principal-agent theory. This simple model can be applied to various PEM systems …

Persistent link: https://www.econbiz.de/10014402932

Financial Market Constraints and Private Investment in a Developing Country

Johnson, Omotunde E. G. - 1990

Firms in developing countries that seek outside financing for investment must often choose their debt-equity combinations in the face of financial market constraints on debt service, on outside equity financing, and on internal finance (endowments). Inefficiencies in the allocation of available...

Persistent link: https://www.econbiz.de/10014395863

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

Overborrowing, Financial Crises and ‘Macro-Prudential’ Policy?

Mendoza, Enrique G. - 2011

This paper studies overborrowing, financial crises and macro-prudential policy in an equilibrium model of business cycles and asset prices with collateral constraints. Agents in a decentralized competitive equilibrium do not internalize the negative effects of asset fire-sales on the value of...

Persistent link: https://www.econbiz.de/10014402904

Optimal Price Indices for Targeting Inflation Under Incomplete Markets

Anand, Rahul - 2010

In models with complete markets, targeting core inflation enables monetary policy to maximize welfare by replicating the flexible price equilibrium. We develop a two-sector two-good new-Keynesian model to study the optimal choice of price index in markets with financial frictions. We find that,...

Persistent link: https://www.econbiz.de/10014397170

Does Spousal Labor Smooth Fluctuations in Husbands' Earnings? : The Role of Liquidity Constraints

Garcia-Escribano, Mercedes - 2004

This paper theoretically and empirically investigates the role of spousal labor in buffering transitory shocks to husbands'' earnings. To measure the amount of the shock that spousal labor absorbs, an instrumented cross-sectional variance decomposition is developed. Using data from the Panel...

Persistent link: https://www.econbiz.de/10014401440

Jointly Optimal Monetary and Fiscal Policy Rules Under Borrowing Constraints

Kumhof, Michael - 2009

We study the welfare properties of an economy where both monetary and fiscal policy follow simple rules, and where a subset of agents is borrowing constrained. The optimized fiscal rule is far more aggressive than automatic stabilizers, and stabilizes the income of borrowingconstrained agents,...

Persistent link: https://www.econbiz.de/10014402211

Savings, Growth and Capital Markets Imperfections : The Case of Borrowing Constraints

De Gregorio, Jose - 1993

This paper studies the effects that borrowing constraints have on savings and growth and argues that, though they increase savings, their effect on growth is ambiguous. Empirical evidence on the extent of borrowing constraints as well as savings, investment, human capital accumulation and growth...

Persistent link: https://www.econbiz.de/10014398466

Credibility dynamics and disinflation plans

Kostadinov, Rumen; Roldán, Francisco - 2020

We study the optimal design of a disinflation plan by a planner who lacks commitment. Having announced a plan, the Central banker faces a tradeoff between surprise inflation and building reputation, defined as the private sector's belief that the Central bank is committed to the plan. Some plans...

Persistent link: https://www.econbiz.de/10012251953

A Political Agency Theory of Central Bank Independence

Eggertsson, Gauti B. - 2003

We propose a theory to explain why, and under what circumstances, a politician gives up rent and delegates policy tasks … to an independent agency. We apply this theory to monetary policy by extending a standard dynamic ""New …-Keynesian"" stochastic general equilibrium model. This model gives a new theory of central bank independence that is unrelated to the …

Persistent link: https://www.econbiz.de/10014400234

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