We study the design of optimal monetary policy (Ramsey policies) in a model with sticky prices and unionized labour markets. Collective wage bargaining and unions monopoly power tend to dampen wage fluctuations and to amplify employment fluctuations relatively to a DNK model with walrasian...

Sind die Maßnahmen des Europäischen Stabilitätsmechanismus geeignet, Schuldenkrisen wie die in Griechenland und Portugal künftig zu verhindern? Eindeutig nicht, denn private Investoren profitieren nach wie vor von den hohen Zinsen der notleidenden Staatsschuldtitel, ohne angemessen an den...

In this paper, we develop a financial stress index for France that can be used as a real-time composite indicator for the state of financial stability in France. We take 17 financial variables from different market segments and extract a common stress component using a dynamic approximate factor...

The financial crisis 2008-2009 and the European sovereign debt crisis have shown that stress on financial markets is important for analyzing and forecasting economic activity. Since financial stress is not directly observable but is presumably reflected in many financial market variables, it is...

The large Public Sector Purchase Programme (PSPP) which the ECB started in 2015 on the basis of monetary policy purposes, had major side-effects on fiscal policy. One concerns the programme´s uncommon seigniorage effects. We find that the PSPP not only led to partly negative seigniorage gains,...

Based on a panel data model this paper investigates whether the effects of fiscal policy on national saving in Europe have changed after the Maastricht Treaty came into force. Recently Giavazzi, Jappelli and Pagano (2000) found evidence that national saving responds nonlinearly to fiscal policy...

This paper discusses alternative adjustment patterns in Bolivia over the last three decades using a SAM-based model that explicitly separates formal from informal activities, includes separate accumulation balance adjustments for different economic agents, differentiates closures by periods of...

In many countries, fiscal policy became strongly expansionary in order to fight the recession. Structural budget deficits increased sharply and might remain high after the end of the recession. This would raise real interest rates and would impair economic growth. Some measures to reduce the...

In the aftermath of the Great Recession and during the debt crisis in the euro area yields on German federal bonds have been exceptionally low. This analysis tries to calculate the profits that the federal government makes due to the low yields. The interest payments that are due to emissions of...

We project the path of the public debt and primary surpluses for a number of countries in the euro area under a fiscal rule based on a set of estimated fiscal policy reaction functions. Our fiscal rule represents a fiscal analogue to a well-known monetary policy rule, and it is calibrated using...