A central puzzle in international finance is that real exchange rates are volatile and, in stark contradiction to effcient risk-sharing, negatively correlated with cross-country consumption ratios. This paper shows that incomplete asset markets and a low price elasticity of tradables can account...

The collapse of the communist regime in Central and South-Eastern Europe gave way to sweeping economic and socio-political changes, marked by the conversion of centrally planned state economies into market economies, political liberalisation and democratisation, as well as to integration into...

The main objectives of the evaluation are: (i) to be accountable and to provide the relevant external co-operation services of the EC and the wider public with an overall independent assessment of the EC’s past and current co-operation relations with Nepal; and (ii) to identify key lessons in...

This paper employs stochastic simulations of a small structural rational expectations model to investigate the consequences of the zero bound on nominal interest rates. We find that if the economy is subject to stochastic shocks similar in magnitude to those experienced in the U.S. over the...