The purpose of this research is to recommend theoretical and program basis for the new economic policy for the purposes of overcoming the recession and enabling the recovery of production in the Croatian economy. Furthermore, the goal is to show that the results of this study provide the...

Most analyses of the East Asian financial crisis have focused on its causes and the links between currency and banking crises. However a related question is what happens in the aftermath of a crisis? What factors determine the path of an economy in the post-devaluation phase? Does it swiftly...

We examine how medium-term movements in real exchange rates and GDP vary with international financial conditions. For this purpose, we study the international transmission of productivity shocks across a variety of IRBC models that incorporate different assumptions about the persistence of...

This study analyses cross-country correlations of stock prices (values of firms) using the basic New Open Economy Macroeconomics model. We show that cross-country correlations of stock prices greatly depend on the currency of export pricing in the case of monetary shocks but not notably for...

We develop a stylized two-sector business cycle model with endogenous firm dynamics in the investment goods sector. The positive correlation between firms' profitability and the relative price of investment goods generates an endogenous persistence mechanism in productivity dynamics which drives...

Can inflation cure mortgage debt overhang and mitigate the severity of housing busts? Focusing on the Great Recession, I address this question through the lens of a quantitative macroeconomic model of illiquid housing, endogenous mortgage pricing, and equilibrium default. First, I show that an...

This paper quantitatively accounts for the cyclical dynamics of key macroeconomic housing and mortgage market variables using a tractable, search-theoretic model of housing with equilibrium mortgage default. To explain these dynamics, the model highlights the importance of liquidity spirals...

Uncertainty has recently become a major concern for policymakers and academics. Spikes in uncertainty are often associated with recessions and have detrimental effects on the aggregate economy. This paper analyzes the effects of uncertainty on firms' hiring and investment decisions, both...

I show how the mechanisms of debt relief, redistribution and the uncertainty related to them could boil down to a discount rate shock for an aggregate representative agent. The mechanism hails from Ramsey's conjecture and the relationship between debt relief and the probability of repayment. To...

With the increasing prominence of volatility in world economies, it is becoming evident that there is a need for more measures of economic volatility to form a basis of comparison to historic economic crisis and events. This topic has been studied as part of larger economic issues including...