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Liquidity, Business Cycles, and Monetary Policy

Kiyotaki, Nobuhiro - 2012

The paper presents a model of a monetary economy where there are differences in liquidity across assets. Money … on assets, reflecting their differences in liquidity. The model is used, first, to investigate how aggregate activity and … asset prices fluctuate with shocks to productivity and liquidity; second, to examine what role government policy might have …

Persistent link: https://www.econbiz.de/10013108309

Monetary Policy, Business Cycles and the Behavior of Small Manufacturing Firms

Gertler, Mark; Gilchrist, Simon - 2021

We present evidence on the cyclical behavior of small versus large manufacturing firms, and on the response of the two classes of firms to monetary policy. Our goal is to take a step toward quantifying the role of credit market imperfections in the business cycle and in the monetary transmission...

Persistent link: https://www.econbiz.de/10013246383

Liquidity Effects, Monetary Policy, and the Business Cycle

Eichenbaum, Martin; Christiano, Lawrence J. - 2022

This paper presents new empirical evidence to support the hypothesis that positive money supply shocks drive short-term interest rates down. We then present a quantitative, general equilibrium model which is consistent with the hypothesis. The two key features of our model are that (i) money...

Persistent link: https://www.econbiz.de/10013324130

Gold Sterilization and the Recession of 1937-38

Irwin, Douglas A. - 2011

The Recession of 1937-38 is often cited as illustrating the dangers of withdrawing fiscal and monetary stimulus too early in a weak recovery. Yet our understanding of this severe downturn is incomplete: existing studies find that changes in fiscal policy were small in comparison to the magnitude...

Persistent link: https://www.econbiz.de/10013118416

The Monetary and Fiscal History of Bolivia, 1960–2017

Kehoe, Timothy J. - 2019

After the economic reforms that followed the National Revolution of the 1950s, Bolivia seemed positioned for sustained growth. Indeed, it achieved unprecedented growth from 1960 to 1977. The rapid accumulation of debt due to persistent deficits and a fixed exchange rate policy during the 1970s...

Persistent link: https://www.econbiz.de/10012892582

The Monetary and Fiscal History of Brazil, 1960-2016

Ayres, João - 2019

Brazil has had a long period of high inflation. It peaked around 100 percent per year in 1964, decreased until the first oil shock (1973), but accelerated again afterward, reaching levels above 100 percent on average between 1980 and 1994. This last period coincided with severe balance of...

Persistent link: https://www.econbiz.de/10012895494

Escaping the Great Recession

Bianchi, Francesco - 2014

We show that policy uncertainty about how the rising public debt will be stabilized accounts for the lack of deflation in the US economy at the zero lower bound. We first estimate a Markov-switching VAR to highlight that a zero-lower-bound regime captures most of the comovements during the Great...

Persistent link: https://www.econbiz.de/10013052104

Monetary/Fiscal Policy Mix and Agents' Beliefs

Bianchi, Francesco - 2014

We reinterpret post World War II US economic history using an estimated microfounded model that allows for changes in the monetary/fiscal policy mix. We find that the fiscal authority was the leading authority in the ‘60s and the ‘70s. The appointment of Volcker marked a change in the...

Persistent link: https://www.econbiz.de/10013052676

When it Rains, it Pours : Procyclical Capital Flows and Macroeconomic Policies

Kaminsky, Graciela; Reinhart, Carmen M.; Vegh, Carlos A. - 2021

Based on a sample of 104 countries, we document four key stylized facts regarding the interaction between capital flows, fiscal policy, and monetary policy. First, net capital inflows are procyclical (i.e., external borrowing increases in good times and falls in bad times) in most OECD and...

Persistent link: https://www.econbiz.de/10013223342

Macroeconomic Shocks and Their Propagation

Ramey, Valerie A. - 2016

This chapter reviews and synthesizes our current understanding of the shocks that drive economic fluctuations. The chapter begins with an illustration of the problem of identifying macroeconomic shocks, followed by an overview of the many recent innovations for identifying shocks. It then...

Persistent link: https://www.econbiz.de/10012998960

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