Showing 1 - 10 of 96
We propose a small open economy model where agents borrow internationally and invest in liquid foreign assets to insure against liquidity shocks, which temporarily shut out the economy of short-term credit markets. Due to the presence of a pecuniary externality individual agents borrow too much...
Persistent link: https://www.econbiz.de/10012287808
The paper scrutinizes the role of wages and capital flows for competitiveness in the new EU member states in the context of real convergence. For this purpose it extends the seminal Balassa-Samuelson model by international capital markets. The augmented Balassa-Samuelson model is linked to the...
Persistent link: https://www.econbiz.de/10010270184
This study analyzes the dynamics between real e ective exchange rates and current account patterns from a novel perspective. We start by dissecting long-run and time-varying short-run dynamics between both variables. Following this, we extend our framework by including interest rates into our...
Persistent link: https://www.econbiz.de/10010396849
Persistent link: https://www.econbiz.de/10015056631
This paper studies optimal time-consistent macroprudential policy in a model with endogenous capital formation. Previous studies on optimal time-consistent macroprudential policy in economies where borrowing is limited by the value of collateral assume that aggregate capital is fixed or apply...
Persistent link: https://www.econbiz.de/10015202305
This paper studies the role of financial market imperfections in the way countries' exports react to a currency depreciation. Using quarterly data for 27 developed and developing countries over the period 1990-2005, we show that the impact of a depreciation will be less positive - or even...
Persistent link: https://www.econbiz.de/10010295990
As economic reforms are mutually interdependent, a liberal policy package needs internal coherence. How can a coherent reform strategy be achieved for a well-balanced and functional economic system? In this paper, we analyze the relationship between financial reforms coherence and international...
Persistent link: https://www.econbiz.de/10010305645
unsustainable intra-E(M)U indebtedness. We analyse the emergence of intra-European imbalances since the year 1990 based on the …
Persistent link: https://www.econbiz.de/10010305920
In the debate on global imbalances, the euro area countries did not receive much attention so far. While the current account is on balance for the entire area, divergences between individual member states have increased since the introduction of the common currency. In this paper, the imbalances...
Persistent link: https://www.econbiz.de/10010305946
This paper analyses the importance of German wage moderation in the context of European imbalances. Using information from a New Keynesian small open economy model with labor market frictions, we derive sign restrictions for a wage markup shock. This information enables us to identify a German...
Persistent link: https://www.econbiz.de/10010329251