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Voluntary Debt Reduction : Incentives and Welfare
Helpman, Elhanan - 2021
In an economy with a debt overhang, investment depends on expected tax rates. On the other hand, expected tax rates depend on the debt's face value. Therefore investment depends on the face value of debt. I show that this may lead to a positive or negative association between debt and investment...
Persistent link: https://www.econbiz.de/10013228742
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Anticipated alternative policy-rate paths in policy simulations
Laséen, Stefan; Svensson, Lars E. O. - 2011
This paper specifies a new convenient algorithm to construct policy projections conditional on alternative anticipated policy-rate paths in linearized dynamic stochastic general equilibrium (DSGE) models, such as Ramses, the Riksbank's main DSGE model. Such projections with anticipated...
Persistent link: https://www.econbiz.de/10008696833
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Inflation Targeting
Svensson, Lars E. O. - 2011
Inflation targeting is a monetary-policy strategy that is characterized by an announced numerical inflation target, an implementation of monetary policy that gives a major role to an inflation forecast and has been called forecast targeting, and a high degree of transparency and accountability....
Persistent link: https://www.econbiz.de/10013131986
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Transparency and Credibility : Monetary Policy with Unobservable Goals
Faust, Jon - 2010
We define and study transparency, credibility, and reputation in a model where the central bank's characteristics are unobservable to the private sector and are inferred from the policy outcome. A low-credibility bank optimally conducts a more inflationary policy than a high-credibility bank, in...
Persistent link: https://www.econbiz.de/10013137302
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Growth and Welfare in a Small Open Economy
Grossman, Gene M. - 2010
, and trades these at exogenously given world prices. We study the welfare implications of R&D subsidies and commercial … achieves the first-best rate of growth, but not the first-best level of welfare. Small tariffs and export subsidies also affect … both growth and welfare. Growth may increase or decrease, depending upon which sector is promoted by the trade policy. But …
Persistent link: https://www.econbiz.de/10013139328
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Inflation Forecast Targeting : Implementing and Monitoring Inflation Targets
Svensson, Lars E. O. - 2011
Inflation targeting is shown to imply inflation forecast targeting: the central bank's inflation forecast becomes an explicit intermediate target. Inflation forecast targeting simplifies both implementation and monitoring of monetary policy. The weight on output stabilization determines how...
Persistent link: https://www.econbiz.de/10013125561
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Foreign Investment with Endogenous Protection
Grossman, Gene M. - 2011
welfare implications. We also allow for lobbying by workers with sector- specific skills and show how the conflicting …
Persistent link: https://www.econbiz.de/10013125846
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A Linder Hypothesis for Foreign Direct Investment
Fajgelbaum, Pablo D. - 2014
We study patterns of FDI in a multi-country world economy. We develop a model featuring non-homothetic preferences for quality and monopolistic competition in which specialization is purely demand-driven and the decision to serve foreign countries via exports or FDI depends on a...
Persistent link: https://www.econbiz.de/10013067204
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Cost-Benefit Analysis of Leaning Against the Wind
Svensson, Lars E. O. - 2016
A simple and transparent framework for cost-benefit analysis of \leaning against the wind" (LAW), that is, tighter monetary policy for financial-stability purposes, is presented. LAW has obvious costs in the form of a weaker economy if no crisis occurs and possible benefits in the form of a...
Persistent link: https://www.econbiz.de/10013000534
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Balanced Growth Despite Uzawa
Grossman, Gene M. - 2016
The evidence for the United States points to balanced growth despite falling investment-good prices and an elasticity of substitution between capital and labor less than one. This is inconsistent with the Uzawa Growth Theorem. We extend Uzawa's theorem to show that the introduction of human...
Persistent link: https://www.econbiz.de/10013001767