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This note shows that full price indexation is not optimal in the long-run in the New Keynesian model. Moreover, we show … that more price stickiness may increase steady state welfare, if price indexation is partial. …
Persistent link: https://www.econbiz.de/10010326095
. The main result is that once a positive degree of indexation is introduced in the model the rule performing better (among …
Persistent link: https://www.econbiz.de/10011651447
The term premium on nominal long-term bonds in the standard dynamic stochastic general equilibrium (DSGE) model used in macroeconomics is far too small and stable relative to empirical measures obtained from the data - an example of the "bond premium puzzle." However, in models of endowment...
Persistent link: https://www.econbiz.de/10011506664
-relevant accounting capital and true depreciation, (ii) mis-indexation of depreciation allowances, (iii) incomplete deductibility of …
Persistent link: https://www.econbiz.de/10010275647
In this paper I investigate to what extent firm-specific uncertainty affects the gain from indexation. Earlier studies … the gain from indexation considerably (from 0 to 1.5 percent of the wage). It is not evident that the gain from indexation …
Persistent link: https://www.econbiz.de/10010321744
This paper estimates a dynamic stochastic general equilibrium (DSGE) model for the European Monetary Union by using Bayesian techniques. A salient feature of the model is an extension of the typically postulated quadratic cost structure for the monopolistic choice of price variables. As shown in...
Persistent link: https://www.econbiz.de/10010281666
This paper first describes the ingredients the present crisis in the euro zone and then evaluates the key options that … was involved as well. I argue that a more fundamental problem is that the euro zone lacks an adjustment mechanism for …
Persistent link: https://www.econbiz.de/10010309225
EURO's will be more stable than thecurrent demand for national currencies. In policy circles this seeminglymoderating …
Persistent link: https://www.econbiz.de/10010324454
setting is used to estimate the intra-day trend in the Euro/U.S. Dollar exchange rate. …
Persistent link: https://www.econbiz.de/10010326060
We propose a positive formal framework for analyzing sovereign bail-outs in the context of the European Monetary Union (EMU) with a view to making policy recommendations regarding improvements to the EMU institutional architecture. We build our analysis on a political economic game-theoretic...
Persistent link: https://www.econbiz.de/10010334489