Halving the US current account deficit as a share of GDP is likely to impose a burden of $2,350 per capita on the United States, which explains why US policymakers want to postpone adjustment. The rest of the world relies on the economic stimulus of a widening US external deficit, which explains...

We consider how fear of model misspecification on the part of the planner and/or the households affects welfare gains from optimal macroprudential taxes in an economy with occasionally binding collateral constraints as in Bianchi (2011). On the one hand, there exist welfare gains from...

The antecedent studies have designed new funding with the intellectual capital money (IKM) upon trading the intellectual capital (IK) to ensure unimpeded access to it and spur its generation and exploitation. This piece applies some standard economic models to examine how the IKM funding might...

The antecedent studies have designed new funding with the intellectual capital money (IKM) upon trading the intellectual capital (IK) to ensure unimpeded access to it and spur its generation and exploitation. This piece examines the static and dynamic behavior of IKM in an open economy. The...

Emerging economies have been subject to abrupt reversals in capital inflows, which have adverse consequences for economic activity and financial stability. An important question for policymakers is how to respond to a sudden loss of external financing and its negative effects on the domestic...

Turkey recovered swiftly from the global financial crisis but sizeable macroeconomic imbalances arose in the process. High consumer price inflation and a wide current account deficit are sources of vulnerability. Even though below-potential growth helps rebalancing and disinflation, these...

This study inspects if there is greater convergence with Germany amongst the Eurozone founding members and if their relations with the hegemonic economy have been more symmetrical after "euroization". The dimensions explored are those inspired by the optimum currency areas (OCA) framework. To...

Are unregulated capital flows excessive during a stagflation episode? We argue that they likely are, owing to a macroeconomic externality operating through the economy's supply side. Inflows raise domestic wages through a wealth effect on labor supply and cause unwelcome upward pressure on...

Results of empirical research have revealed a characteristic hump-shaped effect of monetary policy shocks on output: the effect builds to a peak after several months and then gradually dies out. We analyze, in the context of a "new open economy macroeconomics" model, factors that imply a hump-...

This paper uses a dynamic general equilibrium two-country optimizing model to analyze the consequences of international capital mobility for the effectiveness of monetary policy in open economies. The model shows that the substitutability of goods produced in different countries plays a central...