years, 1983 proved to be the long-awaited turnaround year for the world economy. In fact, the upswing came earlier and with …

which could intervene in the gold market to shield the domestic economy from external conditions. We proceed by identifying … separate supply' shocks, money supply shocks and demand shocks using a Blanchard-Quah methodology. We model the economy as a … small open economy on the gold standard and identify the shocks by imposing long run restrictions on the impact of the …

How do financial frictions affect the response of an economy to aggregate shocks? In this paper, we address this … liquid assets to smooth individual income shocks. We show that the response of this economy to aggregate shocks depends on … reserves and the response of the economy tends to be larger. In this case, agents expect to be liquidity constrained and, due …

thus restricts the ability of the economy to exploit investment opportunities. The economy responds by reducing investment … experience of Spain during the recent debt crisis …