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Siebert, Horst - 2004

This paper analyzes Germany's fiscal policy position. Half of GDP passes through the hands of government, a high debt to GDP ratio limits the maneuvering, and the revenue sharing mechanism prevents a competitive federalism. Most importantly for the future, the federal finance minister has to...

Persistent link: https://www.econbiz.de/10010265427

Identification of animal spirits in a bounded rationality model: An application to the euro area

Jang, Tae-Seok; Sacht, Stephen - 2012

In this paper we empirically examine a heterogenous bounded rationality version of a hybrid New-Keynesian model. The model is estimated via the simulated method of moments using Euro Area data from 1975Q1 to 2009Q4. It is generally assumed that agents' beliefs display waves of optimism and...

Persistent link: https://www.econbiz.de/10010290034

Is there a short-run case for protectionism? Trade policy and the business cycle

Larch, Mario; Lechthaler, Wolfgang - 2011

Recently, the world economy has seen its greatest down turn since World War II. Although not as bad as during the Great Depression, there was still a worrisome increase in protectionist measures, in an attempt to mitigate the economic downturn. Protectionism can have many different faces. It can...

Persistent link: https://www.econbiz.de/10010285719

Is forward-looking inflation targeting destabilizing? The role of policy's response to current output under endogenous investment

Huang, Kevin X. D.; Meng, Qinglai - 2007

in response solely to future inflation induce real indeterminacy of equilibrium. Applying the Samuelson … stickiness or letting policy respond also to current output may help ensure a unique equilibrium. We find that the first channel … incorporated, even a tiny response of policy to current output can render equilibrium determinate for a wide range of response of …

Persistent link: https://www.econbiz.de/10010260586

Protectionism in a liquidity trap

Lechthaler, Wolfgang - 2016

This paper studies the effects of protectionism as a business cycle instrument. In normal times, protectionism reduces international trade, distorts production and reduces output. However, in a liquidity trap protectionism lowers the real interest rate because inflation goes up while the nominal...

Persistent link: https://www.econbiz.de/10011490262

Trend growth, unemployment and optimal monetary policy

Lechthaler, Wolfgang; Tesfaselassie, Mewael - 2015

We analyze the implications of changes in the trend growth rate for optimal monetary policy in the presence of search and matching unemployment. We show that trend growth in itself does not generate a trade-off for the monetary authority, but that it interacts importantly with the inefficiencies...

Persistent link: https://www.econbiz.de/10011301390

Do Bivariate SVAR Models with Long-Run Identifying Restrictions Yield Reliable Results? The Case of Germany

van Zandweghe, Willem; Gottschalk, Jan - 2001

Bivariate SVAR models employing long-run identifying restrictions are often used to investigate the source of business cycle fluctuations. Their advantage is the simplicity in use and interpretation. However, their low dimension may also lead to a failure of the identification procedure, with...

Persistent link: https://www.econbiz.de/10010276923

On the non-optimality of information: an analysis of the welfare effects of anticipated shocks in the New Keynesian model

Wohltmann, Hans-Werner; Winkler, Roland C. - 2009

This paper compares the welfare effects of anticipated and unanticipated cost-push shocks within the canonical New Keynesian model with optimal monetary policy. We find that, for empirically plausible degrees of nominal rigidity, the anticipation of a future cost-push shock leads to a higher...

Persistent link: https://www.econbiz.de/10010277242

The aggregate effects of long run sectoral reallocation

Reicher, Christopher Phillip - 2011

In this paper, I estimate a series of long run reallocative shocks to sectoral employment using a stochastic volatility model of sectoral employment growth for the United States from 1960 through 2011. Reallocative shocks (which primarily measure construction and technology busts) have little...

Persistent link: https://www.econbiz.de/10010277346

A tale of two countries: A comparison of the aggregate effects of sectoral reallocation in the United States and Germany

Reicher, Christopher Phillip - 2011

This paper compares the aggregate effects of sectoral reallocation in the United States and Western Germany using a stochastic volatility model of sectoral employment growth. Reallocative shocks have no effect on the natural rate of unemployment in either country, and there is mild evidence that...

Persistent link: https://www.econbiz.de/10010277351