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EMU : Ready, or Not?
Obstfeld, Maurice - 1999
In this paper I focus on two specific hazard areas in the transition from Stage Two to Stage Three of European economic and monetary union (EMU), as well as on some key problems of Stage Three that EMU's monetary and fiscal structures appear ill-prepared to handle. The transitional hazards are...
Persistent link: https://www.econbiz.de/10012471509
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Asset Prices and Aggregate Demand in a "Covid-19" Shock : A Model of Endogenous Risk Intolerance and LSAPs
Caballero, Ricardo J. - 2020
addressing these contractions. The key mechanism stems from heterogeneous risk tolerance: as a recessionary shock hits the …In this paper we: (i) provide a model of the endogenous risk intolerance and severe aggregate demand contractions … following a large real (non-financial) shock; and (ii) demonstrate the effectiveness of Large Scale Asset Purchases (LSAPs) in …
Persistent link: https://www.econbiz.de/10012482001
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Learning from Prices : Public Communication and Welfare
Amador, Manuel - 2008
We study the effect of releasing public information about productivity or monetary shocks when agents learn from nominal prices. While public releases have the benefit of providing new information, they can have the cost of reducing the informational efficiency of the price system. We show that,...
Persistent link: https://www.econbiz.de/10012464392
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Endogenous Volatility at the Zero Lower Bound : Implications for Stabilization Policy
Basu, Susanto - 2015
At the zero lower bound, the central bank's inability to offset shocks endogenously generates volatility. In this setting, an increase in uncertainty about future shocks causes significant contractions in the economy and may lead to non-existence of an equilibrium. The form of the monetary...
Persistent link: https://www.econbiz.de/10012456833
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Monetary Policy Uncertainty and Economic Fluctuations
Creal, Drew D. - 2014
react in opposite directions to a shock to the real economy, and the response of inflation to uncertainty shocks vary across …
Persistent link: https://www.econbiz.de/10012458071
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Financial Development and the Instability of Open Economies
Aghion, Philippe - 2004
This paper introduces a framework for analyzing the role of financial factors as a source of instability in small open economies. Our basic model is a dynamic open economy model with a tradeable good produced with capital and a country-specific factor. We also assume that firms face credit...
Persistent link: https://www.econbiz.de/10012468447
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Big Banks and Macroeconomic Outcomes : Theory and Cross-Country Evidence of Granularity
Bremus, Franziska - 2013
Does the mere presence of big banks affect macroeconomic outcomes? In this paper, we develop a theory of granularity (Gabaix, 2011) for the banking sector, introducing Bertrand competition and heterogeneous banks charging variable markups. Using this framework, we show conditions under which...
Persistent link: https://www.econbiz.de/10012459568
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Systemic Risk and Stability in Financial Networks
Acemoglu, Daron - 2013
systemic failures due to contagion of counterparty risk. We show that financial contagion exhibits a form of phase transition … socially inefficient due to the presence of a network externality: even though banks take the effects of their lending, risk …
Persistent link: https://www.econbiz.de/10012459934
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Econometric Measures of Systemic Risk in the Finance and Insurance Sectors
Billio, Monica - 2010
We propose several econometric measures of systemic risk to capture the interconnectedness among the monthly returns of … find that all four sectors have become highly interrelated over the past decade, increasing the level of systemic risk in … of market dislocation, and systemic risk arises from a complex and dynamic network of relationships among hedge funds …
Persistent link: https://www.econbiz.de/10012462432
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Technology (and Policy) Shocks in Models of Endogenous Growth
Jones, Larry E. - 1999
Is there a trade-off between fluctuations and growth? The empirical evidence is mixed, with some studies (Kormendi and Meguire (1985)) finding a positive relationship, while others (Ramey and Ramey (1995)) finding the a negative one. Our objective in this paper is to understand how fundamental...
Persistent link: https://www.econbiz.de/10012471733