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Cascades in Networks and Aggregate Volatility
Acemoglu, Daron - 2010
We provide a general framework for the study of cascade effects created by interconnections between sectors, firms or financial institutions. Focusing on a multi sector economy linked through a supply network, we show how structural properties of the supply network determine both whether...
Persistent link: https://www.econbiz.de/10013136361
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A Center-Periphery Model of Monetary Coordination and Exchange Rate Crises
Buiter, Willem H.; Corsetti, Giancarlo; Pesenti, Paolo A. - 2021
inflation-prone Periphery Countries that use an exchange rate peg as an anti- inflationary device, when the Center is hit by an … aggregate demand shock. Cooperation in the Periphery is constrained to be symmetric: costs and benefits must be equal for all …. The first is when the constrained cooperative response of the Periphery is a moderate common devaluation while the non …
Persistent link: https://www.econbiz.de/10013219188
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Interfirm Relationships and Business Performance
Cai, Jing - 2017
We organized business associations for the owner-managers of randomly selected young Chinese firms to study the effect of business networks on firm performance. We randomized 2,800 firms into small groups whose managers held monthly meetings for one year, and into a “no- meetings” control...
Persistent link: https://www.econbiz.de/10012966933
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The Geography of Inter-State Resource Wars
Caselli, Francesco - 2013
geographic location for inter-State conflict. The main predictions of the theory are that conflict tends to be more likely when …
Persistent link: https://www.econbiz.de/10013083090
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Equity Depletion from Government-Guaranteed Debt
Hall, Robert E. - 2009
Government guarantees of private debt deplete equity. The depletion is greatest during periods when the probability of a guarantee payoff is highest. In a setting otherwise subject to Modigliani-Miller neutrality, firms issue guaranteed debt up to the limit the government permits. Declines in...
Persistent link: https://www.econbiz.de/10012765575
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Markets Versus Governments : Political Economy of Mechanisms
Acemoglu, Daron - 2009
We study the optimal Mirrlees taxation problem in a dynamic economy with idiosyncratic (productivity or preference) shocks. In contrast to the standard approach, which implicitly assumes that the mechanism is operated by a benevolent planner with full commitment power, we assume that any...
Persistent link: https://www.econbiz.de/10012767334
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The Political Risks of Fighting Market Failures : Subversion, Populism and the Government Sponsored Enterprises
Glaeser, Edward L. - 2012
There are many possible ways of reforming the Government-Sponsored Enterprises that insure mortgages against default, including a purely public option, complete privatization or a hybrid model with private firms and public catastrophic insurance. If the government is sufficiently capable and...
Persistent link: https://www.econbiz.de/10013106080
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Macroprudential Regulation Versus Mopping Up after the Crash
Jeanne, Olivier - 2013
We study the interplay of optimal ex-ante (macroprudential) and ex-post (monetary or fiscal stimulus) measures to respond to systemic financial crises in a tractable model of fire sales. We find that it is generally optimal to use both, rejecting the Greenspan doctrine to only intervene ex post....
Persistent link: https://www.econbiz.de/10013089016
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Generational Risk - is it a Big Deal? : Simulating an 80-Period OLG Model with Aggregate Shocks
Hasanhodzic, Jasmina - 2013
The theoretical literature presumes generational risk is large enough to merit study and that such risk can be meaningfully shared via appropriate government policies. This paper assesses these propositions. It develops an 80-period OLG model to directly measure generational risk and the extent...
Persistent link: https://www.econbiz.de/10013079749
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Bailouts, Time Inconsistency, and Optimal Regulation
Chari, Varadarajan V.; Kehoe, Patrick J. - 2021
We develop a model in which, in order to provide managerial incentives, it is optimal to have costly bankruptcy. If benevolent governments can commit to their policies, it is optimal not to interfere with private contracts. Such policies are time inconsistent in the sense that, without...
Persistent link: https://www.econbiz.de/10013311917