While consumption habits have been utilised as a means of generating a hump shapedoutput response to monetary policy shocks in sticky-price New Keynesian economies,there is relatively little analysis of the impact of habits (particularly, external habits) onoptimal policy. In this paper we...

We contribute to the intense debate on the real effects of …fiscal stimuli by showingthat the impact of government expenditure shocks depends crucially on key countrycharacteristics, such as the level of development, exchange rate regime, openness totrade, and public indebtedness. Based on a...

A weakening dependence on rain-fed agriculture has been a hallmark of the economictransformation of countries throughout history. Rural citizens in developing countries to-day, however, remain highly exposed to fluctuations in the weather. This exposure affectsthe incomes these citizens earn and...

A sample of Iowa farm couples is used to evaluate whether off-farm labor supply decisions respond to permanent and transitory components of farm income. Off-farm labor supply of both spouses declines in response to increases in permanent farm income. Farm wives also reduce off-farm labor supply...

Our purpose is to show how large difference of beliefs induced by fear of crashesis amenable to large and persistent price responses to contemporaneous shocks. Weconstruct a pure exchange economy populated by two agents who estimate strictlydifferent models regarding the fundamental. In...

Several policy issues arise in this context. If households are unable or unwilling to move inold age, their consumption behaviour may be constrained by asset illiquidity...

Die zehn der Europäischen Union 2004 beigetretenen Mitgliedsländer werden nach einer nominalen Konvergenz und der Erfüllung der Konvergenzkriterien von Maastricht der Europäischen Währungsunion beitreten. Um ein hohes Maß an Konvergenz zu erreichen, verfolgen die neuen Mitgliedsländer...