Showing 1 - 10 of 10
After the Global Financial Crisis a controversial rush to fiscal austerity followed in many countries. Yet research on the effects of austerity on macroeconomic aggregates was and still is unsettled, mired by the difficulty of identifying multipliers from observational data. This paper...
Persistent link: https://www.econbiz.de/10012459247
The trilemma of international finance explains why interest rates in countries that fix their exchange rates and allow unfettered cross-border capital flows are largely outside the monetary authority's control. Using historical panel-data since 1870 and using the trilemma mechanism to construct...
Persistent link: https://www.econbiz.de/10012455606
A central question in applied research is to estimate the effect of an exogenous intervention or shock on an outcome. The intervention can affect the outcome and controls on impact and over time. Moreover, there can be subsequent feedback between outcomes, controls and the intervention. Many of...
Persistent link: https://www.econbiz.de/10015056147
An impulse response is the dynamic average effect of an intervention across horizons. We use the well-known Kitagawa-Blinder-Oaxaca decomposition to explore a response's heterogeneity over time and over states of the economy. This can be implemented with a simple extension to the usual local...
Persistent link: https://www.econbiz.de/10014226168
the world consumption wealth ratio over long period of times and show that they anticipate movements of the real rate of … interest. Second, our estimates suggest that the world real rate of interest is likely to remain low or negative for an …
Persistent link: https://www.econbiz.de/10012456047
We provide an overview of the recent developments of the literature on the determinants of long term capital flows, global imbalances and valuation effects. We present the main stylized facts of the new international financial landscape in which external balance sheets of countries have grown in...
Persistent link: https://www.econbiz.de/10012459422
In broad perspective, there have been essentially two competing views of the global financial crisis, albeit there are some complementarities among them. One view looks across the border: it mainly blames external imbalances, the large-scale mix of unprecedented pattern current account deficits...
Persistent link: https://www.econbiz.de/10012460056
Do external imbalances increase the risk of financial crises? In this paper, we study the experience of 14 developed …
Persistent link: https://www.econbiz.de/10012462090
We propose that analysis of purchasing power parity (PPP) and the law of one price (LOOP) should explicitly take into account the possibility of commodity points' thresholds delineating a region of no central tendency among relative prices, possibly due to lack of perfect arbitrage in the...
Persistent link: https://www.econbiz.de/10012472761
Most trade is invoiced in very few currencies. Despite this, the Mundell-Fleming benchmark and its variants focus on pricing in the producer's currency or in local currency. We model instead a 'dominant currency paradigm' for small open economies characterized by three features: pricing in a...
Persistent link: https://www.econbiz.de/10012455737