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Animal spirits and monetary policy
De Grauwe, Paul - 2008
We develop a behavioral macroeconomic model in which agents use simple but biased rules to forecast future output and inflation. This model generates endogenous waves of optimism and pessimism (Animal Spirits") that are generated by the correlation of biased beliefs. We contrast the dynamics of...
Persistent link: https://www.econbiz.de/10010272308
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Top-down versus bottom-up macroeconomics
De Grauwe, Paul - 2010
I distinguish two types of macroeconomic models. The first type are top-down models in which some or all agents are capable of understanding the whole picture and use this superior information to determine their optimal plans. The second type are bottom-up models in which all agents experience...
Persistent link: https://www.econbiz.de/10010272346
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Booms and busts: New Keynesian and behavioral explanations
De Grauwe, Paul - 2010
Capitalism is characterized by booms and busts. Periods of strong growth in output alternate with periods of declines in economic growth. Every macro-economic theory should attempt to explain these endemic business cycle movements. In this paper I present two paradigms that attempt to explain...
Persistent link: https://www.econbiz.de/10010274846
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Solving DSGE Models Without a Grid
Levintal, Oren - 2013
This paper presents a global solution method to DSGE models, which does not depend on a grid and hence does not suffer from the curse of dimensionality. The method enables to approximate the Taylor series of the policy function at any arbitrary point of the state space. Once the Taylor series is...
Persistent link: https://www.econbiz.de/10013074022
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Taylor Projection : A New Solution Method for Dynamic General Equilibrium Models
Levintal, Oren - 2018
This paper presents a new solution method for dynamic equilibrium models. The proposed method approximates the solution …
Persistent link: https://www.econbiz.de/10012936510
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The EAGLE model for Hungary : a global perspective
Békesi, László; Kaszab, Lóránt; Szentmihályi, Szabolcs - 2017
In this paper we adopt the Hungarian version of the EAGLE (Euro Area GLobal Economy) model. The version of the EAGLE model used in this paper allows for the high import content of export - a typical feature of small open economies such as Hungary. We study the effects of four globally important...
Persistent link: https://www.econbiz.de/10011674240
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Macroprudential policies in the EAGLE FLI model calibrated for Hungary
Fukker, Gábor; Kaszab, Lóránt - 2019
In this paper we develop the Hungarian version of the EAGLE FLI (Euro Area GLobal Economy model with Financial LInkages) model which is the EAGLE model enriched with financial frictions and country-specific banking sector. The EAGLE FLI features the intermediation of loanable funds (ILF) view in...
Persistent link: https://www.econbiz.de/10011986731
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Comparing Recursive Equilibrium in Economies with Dynamic Complementarities and Indeterminacy
Datta, Manjira - 2016
We prove the existence of a minimal state space recursive equilibrium (RE) for a broad class of infinite horizon … dynamic general equilibrium models with positive externalities, dynamic complementarities, public policy, equilibrium … the literature. Rather, using partial ordering methods, we provide a qualitative theory of equilibrium comparative statics …
Persistent link: https://www.econbiz.de/10012983358
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Monetary policy and stock market boom-bust cycles
Christiano, Lawrence; Ilut, Cosmin; Motto, Roberto; … - 2008
We explore the dynamic effects of news about a future technology improvement which turns out ex post to be overoptimistic. We find that it is difficult to generate a boom-bust cycle (a period in which stock prices, consumption, investment and employment all rise and then crash) in response to...
Persistent link: https://www.econbiz.de/10011605001
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Long-run growth expectations and "global imbalances"
Hoffmann, Mathias; Krause, Michael U.; Laubach, Thomas - 2011
This paper examines to what extent the build-up of global imbalances since the mid-1990s can be explained in a purely real open-economy DSGE model in which agents' perceptions of long-run growth are based on filtering observed changes in productivity. We show that long-run growth estimates based...
Persistent link: https://www.econbiz.de/10010308571