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A Global Equilibrium Model of Sudden Stops and External Liquidity Management
Caballero, Ricardo J.; Panageas, Stavros - 2008
Emerging market economies, which have much of their growth ahead of them, either run or should run persistent current account deficits in order to smooth consumption intertemporally. The counterpart of these deficits is their dependence on capital inflows, which can suddenly stop. We make two...
Persistent link: https://www.econbiz.de/10014219484
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Managing capital flows in the presence of external risks
Reyes-Heroles, Ricardo; Tenorio, Gabriel - 2017
We introduce external risks, in the form of shocks to the level and volatility of world interest rates, into a small open economy model subject to the risk of sudden stops—large recessions together with abrupt reversals in capital inflows| and characterize optimal macroprudential policy in...
Persistent link: https://www.econbiz.de/10011779580
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A case where Barro expectations are not rational
Schlicht, Ekkehart - 2012
": they believe that government debt must necessarily be repaid and therefore leave the present value of their income streams …
Persistent link: https://www.econbiz.de/10009490196
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Unexpected consequences of Ricardian expectations : Erratum
Schlicht, Ekkehard - 2013
Persistent link: https://www.econbiz.de/10010350222
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Unexpected consequences of Ricardian expectations
Schlicht, Ekkehart - 2012
. This divergence from the Ricardian equivalence thesis is traced to the omission of interest payments on public debt as part …
Persistent link: https://www.econbiz.de/10009656223
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Unexpected consequences of Ricardian expectations
Schlicht, Ekkehart - 2013
. This divergence from the Ricardian equivalence thesis is traced to the omission of interest payments on public debt as part …
Persistent link: https://www.econbiz.de/10010441506
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A model of fickle capital flows and retrenchment : global liquidity creation and reach for safety and yield
Caballero, Ricardo J.; Simsek, Alp - 2016 - This draft: December 8, 2016
We develop a model of gross capital flows and analyze their role in global financial stability. In our model, consistent with the data, when a country experiences asset fire sales, foreign investments exit (fickleness) while domestic investments abroad return home (retrenchment). When countries...
Persistent link: https://www.econbiz.de/10011573237
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Monetary policy, trends in real interest rates and depressed demand
Beaudry, Paul; Meh, Césaire Assah - 2021 - Last updated: August 16, 2021
long run. In particular, we show that if monetary policy reacts aggressively to inflation, this supports a steady state … where inflation is close to the central bank's target. However, the same aggressive policy simultaneously favours the … inflation are lower and monetary policy is constrained by the effective lower bound. We discuss how fiscal policy can be used to …
Persistent link: https://www.econbiz.de/10012546126
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The role of expectations in sudden stops
Mertens, Karel (contributor) - 2007
This paper presents a flexible-price small open economy model with a "peso problem" in productivity states. Agents rationally adjust their beliefs about future productivity growth after the arrival of news. A downward revision of expectations triggers a Sudden Stop, together with large declines...
Persistent link: https://www.econbiz.de/10003728236
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Contingent reserves management : an applied framework
Caballero, Ricardo J. (contributor);  … - 2005 - This version: September 2004
One of the most serious problems that a central bank in an emerging market economy can face is the sudden reversal of capital inflows. Hoarding international reserves can be used to smooth the impact of such reversals, but these reserves are seldom sufficient and always expensive to hold. In...
Persistent link: https://www.econbiz.de/10003230146