I construct risk-sensitive approximations of policy functions of DSGE models around the stochastic steady state and ergodic mean that are linear in the state variables. The method requires only the solution of linear equations using standard perturbation output to construct the approximation and...

The risk of catastrophes is one of the greatest threats by climate change. Yet, the most common Integrated Assessment Models produce the counterintuitive result that a higher concern about climate change risks does not lead to stronger near-term abatement efforts. This paper probes whether this...

Germany entered the euro with a current account deficit but over the entire past decade has run large and persistent current account surpluses. Besides joining the common currency, the increase of Germany's current account since the late 1990s has been accompanied by strong shifts in the...

This paper shows entropic tilting to be a flexible and powerful tool for combining medium-term forecasts from BVARs with short-term forecasts from other sources (nowcasts from either surveys or other models). Tilting systematically improves the accuracy of both point and density forecasts, and...

The aim and scope of this paper is to isolate the effects of population ageing in the context of potential Scottish independence. Fiscal challenges are often quoted as a strong argument against independence. Demographic processes play an important role in determining future economic growth via...

O crescimento econômico tem sido uma das grandes questões da sociedade atual. Desde 2008 as grandes potências vêm enfrentando dificuldades para retornar ao ciclo de desenvolvimento pelo qual passavam antes da crise mundial afetando os países emergentes que, por sua vez, devem buscar uma...

The purpose of this study is to investigate the relation between regional convergence inside of countries in EU and overall economic growth, and, based on it, to establish some relevant behavioural regimes. As data sources we are using the available dataset NUTS 2 from EUROSAT for the period...

Did the increase in counterparty risk perception in the interbank market since autumn 2007 contribute to the severe contraction of the US economy? To address this question we introduce interbank market uncertainty in a DSGE model with frictional financial intermediation. Interbank uncertainty is...

Ongoing demographic change will lead to a relative scarcity of raw labor to the effect that output growth will be decreasing in the next decades, a secular stagnation. As physical capital will be relatively abundant, this decrease of output will be accompanied by reductions of asset returns. We...