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Money Shocks in a Small Open Economy with Dollarization, Factor Price Rigidities, and Nontradeables

Sarajevs, Vadims - 2007

The impact of an unanticipated monetary shock in a small open economy with dollarization, factor price rigidities, and nontradeables is re-examined in an optimizing intertemporal general equilibrium model. The framework of an earlier study is extended to incorporate foreign real money balances...

Persistent link: https://www.econbiz.de/10012729029

Canada's pioneering experience with a flexible exchange rate in the 1950s : (hard) lessons learned for monetary policy in a small open economy

Bordo, Michael D. (contributor); Dib, Ali (contributor); … - 2007

This paper revisits Canada's pioneering experience with floating exchange rate over the period 19501962. It examines … whether the floating rate was the best option for Canada in the 1950s by developing and estimating a New Keynesian small open … that monetary policy was more volatile in the post-1957 period and Canada's macroeconomic performance suffered as a result …

Persistent link: https://www.econbiz.de/10003560550

Financial intermediation, resource allocation, and macroeconomic interdependence

Ozhan, G. Kemal - 2016

This paper studies the role of the financial sector in affecting domestic resource allocation and cross-border capital flows. I develop a quantitative, two-country, macroeconomic model in which banks face endogenous and occasionally binding leverage constraints. Banks lend funds to be invested...

Persistent link: https://www.econbiz.de/10011975295

Capital controls and monetary policy autonomy in a small open economy

Davis, Scott; Presno, Ignacio - 2017

Is there a link between capital controls and monetary policy autonomy in a country with a floating currency? Shocks to capital flows into a small open economy lead to volatility in asset prices and credit supply. To lessen the impact of capital flows on financial instability, a central bank...

Persistent link: https://www.econbiz.de/10011629954

Optimal Reserves in Financially Closed Economies

Jeanne, Olivier - 2016

Financially closed economies insure themselves against current-account shocks using international reserves. We characterize the optimal management of reserves using an open-economy model of precautionary savings and emphasize several results. First, the welfare-based opportunity cost of reserves...

Persistent link: https://www.econbiz.de/10012977747

Reducing macroeconomic imbalances in Turkey

Röhn, Oliver; Gönenç, Rauf; Koen, Vincent; Erdoğan … - 2014

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...

Persistent link: https://www.econbiz.de/10010464946

Capital flows in the euro area and TARGET2 balances

Hristov, Nikolay; Hülsewig, Oliver; Wollmershäuser, Timo - 2018

We estimate a panel VAR model for the euro area to quantitatively asses the contribution of the TARGET2 system to the propagation of different types of structural economic shocks as well as to the historical evolution of aggregate economic activity in euro area member countries. Our results...

Persistent link: https://www.econbiz.de/10011793977

Crisis and Global Imbalances : The Fragility of the Current International Monetary System

Ricci, Andrea - 2010

Global structural factors both monetary and real played a prominent role in the burst of the subprime crisis: 1) the so-called Bretton Woods II international monetary system; 2) the reduction of US real investment return compared with competing countries. We develop a two-country partial...

Persistent link: https://www.econbiz.de/10013135939

Monetary Policy, Investment Dynamics, and the Intertemporal Approach to the Current Account

Bergin, Paul R. - 1998

This paper applies the intertemporal approach to the current account to the case of monetary shocks. A two-country dynamic general equilibrium model with predetermined wages is proposed as a means to bridge the gap between Mundell-Fleming and modern intertemporal models. Early versions of...

Persistent link: https://www.econbiz.de/10014060165

Do Central Banks Respond to Exchange Rate Movements? A Markov-Switching Structural Investigation

Alstadheim, Ragna - 2013

the 1980s and early 1990s, to a low response some time after inflation targeting was implemented. Canada also observed a …

Persistent link: https://www.econbiz.de/10013073105