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fully operational. A second relevant body of theory is that pertaining to currency crises. Formal models clarify various … recently- developed fiscal theory of price level determination, which if valid would have major implications for monetary …-fiscal arrangements in currency unions. This theory does not contend that fiscal behavior drives an accommodative monetary authority, but …
Persistent link: https://www.econbiz.de/10012471392
The global financial crisis which erupted in the United States instantaneously swept across Europe. Like the United States, the European Monetary Union (EMU) was ripe for a crash. It had its own real estate bubble, specifically in Ireland and Spain, indulged in excessive deficit spending,...
Persistent link: https://www.econbiz.de/10012460307
In the presence of asymmetric information, the stage at which financing decisions are made about investment projects in a small open economy is crucial for the composition of international capital inflows as well as for the efficiency of channeling savings into investment. This paper compares...
Persistent link: https://www.econbiz.de/10012471014
conducting analysis in a macroeconomic model that is designed to respect both neoclassical theory and empirical regularities …
Persistent link: https://www.econbiz.de/10012471031
This paper explores several issues concerning a possible zero lower bound (ZLB) including its theoretical rationale; the magnitude of effects of low sustained inflation on real interest rates; the validity of analyzing monetary policy in models with no monetary variables; and the dynamic...
Persistent link: https://www.econbiz.de/10012471090
In Razin, Sadka and Yuen (1998, 1999a), we explored the policy implications of the home-bias in international portfolio investment as a result of asymmetric information problems in which domestic savers, being 'close' to the domestic market, have an informational advantage over foreign portfolio...
Persistent link: https://www.econbiz.de/10012471385
This paper argues that, in studying the monetary policy transmission process, more emphasis should be given to the systematic portion of policy behavior and correspondingly less to random shocks basically because shocks account for a very small fraction of policy-instrument variability. Analysis...
Persistent link: https://www.econbiz.de/10012471390
In a static setup, migration of unskilled labor may be resisted by the entire native-born population because, being relatively low earners, migrants are net beneficiaries of the fiscal system. However, the paper shows that with a pay-as-you-go pension, an important pillar of the welfare state,...
Persistent link: https://www.econbiz.de/10012471787
This paper examines the viability of dual exchange-rate regimes. Typically, under such a regime the exchange rates applicable to current-account(commercial) transactions and to capital-account (financial) transactions differ from each other. This difference may be determined in the free market...
Persistent link: https://www.econbiz.de/10012477173
This paper is concerned with the optimal inflation rate in an overlapping-generations economy in which (i) aggregate output is constrained by a standard neoclassical production function with diminishing marginal products for both capital and labor and (ii) the transaction-facilitating services...
Persistent link: https://www.econbiz.de/10012477183