According to the expectations channel, a fiscal consolidation may give rise to less contractionary, or even expansionary effects on consumption, despite a decline in current disposable income. Intuitively, people may accumulate a stock of savings in anticipation of the consolidation and may...

We study the potential role of correlated refinancing abilities among di.erent countries for the disruption of government bond markets in a currency union. Following Morris and Shin (2004) we use a global games framework and model the simultaneous investment decision into two assets, which are...

We examine structural differences in growth vulnerabilities across countries associated with financial risk indicators. Considering trade openness, financial sector size, the public spending ratio and government effectiveness, our findings suggest the existence of a structural gap and a risk...

In our experimental setting, participants face the decision to invest into two assets which are subject to correlated information. While fundamental states and signals about fundamental states are correlated, success and default of the investment projects is determined separately. Nevertheless,...

We study the revision of survey expectations in response to macroeconomic shocks, which we identify in vector autoregressive models with sign restrictions. We find that survey respondents distinguish between movements along the Phillips curve and shifts of the Phillips curve, depending on the...

We use survey data to study how consumers assess the macroeconomic effects of structural oil market shocks on the U.S. economy using vector autoregressive models. To structurally decompose oil price changes, we impose sign restrictions on impulse responses. We find that the survey respondents'...

We study the effects of macroeconomic shocks on several measures of economic inequality obtained from U.S. survey data. To identify aggregate supply, aggregate demand, and monetary policy shocks, we estimate structural vector autoregressions and impose sign and zero restrictions on impulse...

This paper empirically quantifies the importance of fiscal policy in shaping the monetary policy transmission mechanism and derives implications for monetary-fiscal interactions. First, we document that a contractionary monetary policy shock, besides lowering output and prices, leads to a...