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Externalities, Incentives and Failure to Achieve National Objectives in Decentralized Economies

Aizenman, Joshua; Isard, Peter - 2021

The purpose of this paper is to study why decentralized economies often fail to achieve national objective in the presence of externalities. The paper employs a two-period, open economy framework in which the central government allocates its tax revenues among a larger number of individual...

Persistent link: https://www.econbiz.de/10013222246

Externalities, Incentives, and Economic Reforms

Aizenman, Joshua; Isard, Peter - 2021

The paper emphasizes the role of institutions and incentives in the presence of externalities. An economy with multiple … effective institutions exist for overcoming coordination failure. External financing may weaken incentives for adjustment over … that strengthen incentives to provide effort. Uncertainty regarding future taxes reduces present effort and the …

Persistent link: https://www.econbiz.de/10013233750

Macroeconomic Adjustment and the History of Crises in Open Economies

Aizenman, Joshua - 2012

This paper investigates the impact of the history of crises on macroeconomic performance. We first study the impact of past banking crises on the probability of a future banking crisis. Applying data for 1980‐2010 for all countries for which the required information is available, controlling...

Persistent link: https://www.econbiz.de/10013098139

Trade Dependency, Bargaining and External Debt

Aizenman, Joshua - 2010

This paper analyzes the factors determining the effective payment on outstanding debt in the presence of partial defaults, and the feasibility of renewed investment. We show that the bargaining outcome, which determines the repayment, is dictated by the trade dependency, as measured by the...

Persistent link: https://www.econbiz.de/10013135125

Asset Class Diversification and Delegation of Responsibilities between Central Banks and Sovereign Wealth Funds

Aizenman, Joshua - 2010

This paper presents a model comparing the degree of asset class diversification abroad by a central bank and a sovereign wealth fund. We show that if the central bank manages its foreign asset holdings in order to meet balance of payments needs, particularly in reducing the probability of sudden...

Persistent link: https://www.econbiz.de/10013137768

Self-Fulfilling Expectations and Fluctuations in Aggregate Demand

Woodford, Michael - 2010

The paper presents an intertemporal general equilibrium model with rationing in the product market, in which stationary sunspot equilibria are shown to exist, indicating the possibility of fluctuations in economic activity simply due to self-fulfilling variations in economic agents'...

Persistent link: https://www.econbiz.de/10013138365

Debt and Conditionality Under Endogenous Terms of Trade Adjustment

Aizenman, Joshua - 2010

The purpose of this study is to identify conditions under which renewed international. lending will benefit both the developed and the developing countries. Our analysis will evaluate how the presence of terms of trade adjust-rent and distorted credit markets affect the conditions for the...

Persistent link: https://www.econbiz.de/10013139886

The Central-Bank Balance Sheet as an Instrument of Monetary Policy

Cúrdia, Vasco - 2010

While many analyses of monetary policy consider only a target for a short-term nominal interest rate, other dimensions of policy have recently been of greater importance: changes in the supply of bank reserves, changes in the assets acquired by central banks, and changes in the interest rate...

Persistent link: https://www.econbiz.de/10013139902

Optimal Monetary and Fiscal Policy in a Liquidity Trap

Eggertsson, Gauti B. - 2012

In previous work (Eggertsson and Woodford, 2003), we characterized the optimal conduct of monetary policy when a real disturbance causes the natural rate of interest to be temporarily negative, so that the zero lower bound on nominal interest rates binds, and showed that commitment to a...

Persistent link: https://www.econbiz.de/10013102000

Inflation Targeting and Financial Stability

Woodford, Michael - 2012

A number of commentators have argued that the desirability of inflation targeting as a framework for monetary policy analysis should be reconsidered in light of the global financial crisis, on the ground that it requires neglect of the implications of monetary policy for financial stability....

Persistent link: https://www.econbiz.de/10013108003

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