Chapter 1: Optimal Long-Run Inflation with Occasionally-Binding Financial Constraints.This paper studies the optimal inflation rate in a simple New Keynesian model with occasionally-binding collateral constraints that intermediate-good firms face on hiring labor. For empirically-relevant degrees...

The Greek parliamentary elections in January .2015 led to a foreseeable change in government. The coalition government between the conservative Nea Dimokratia and of the socialist PASOK, become replaced. by a coalition government between the left wing coalition party SYRIZA and the extreme...

This paper focuses on the impact of full capital account liberalization on macroeconomic volatility in Greece. According to the standard neoclassical model, such liberalization is to be desired because, among other advantages, it may reduce macroeconomic volatility. The link between...

We propose two new criteria to evaluate the appropriateness of a country joining a larger currency area. The first, asymmetric-shocks-on-its-head, argues that asymmetric shocks to real GDP provide an argument for adopting a common currency. The argument comes in three steps. First, independent...

The massive stocks of foreign exchange reserves, mostly held in the form of U.S. T-Bonds by emerging economies, are still an important puzzle. Why do emerging economies continue to willingly loan to the United States despite the low rates of return? We propose that a dynamic general equilibrium...

Effects of international financial integration on the volatility of the total output and its main components have been a subject of rigorous academic discussion for decades. Even nowadays recent empirical literature suggests that its long-term benefits on economic growth are associated with...

The massive stocks of foreign exchange reserves, mostly held in the form of U.S. T-Bonds by emerging economies, are still an important puzzle. Why do emerging economies continue to willingly loan to the United States despite the low rates of return? We propose that a dynamic general equilibrium...

In this paper, we document the main factors underlying the foreign portfolio inflows to Gulf Corporation Council countries (hereafter GCC) by employing a recently published database of cross-country portfolio holdings by the International Monetary Fund. We find that bilateral factors such as...

The Maastricht convergence criteria set constraints on both monetary and fiscal policies in the EMU Accession Countries. This paper uses a DSGE model of a two sector small open economy with distortionary taxes to address the following question: How do the Maastricht convergence criteria modify...

Applying a stochastic dynamic general equilibrium model, the performance of various simple rules is analyzed in a small open economy context. The aspects that are considered in the analysis include the degree of exchange rate pass-through, trade openness, the policy objective and the source and...