Showing 1 - 10 of 35
We present the first necessary and sufficient conditions for the existence of a unique perfect-foresight solution, returning to a given steady-state, in an otherwise linear model with occasionally binding constraints. We derive further conditions on the existence of a solution in such models,...
Persistent link: https://www.econbiz.de/10011422742
Assuming inflation is a forward variable in Taylor (1999) model, this paper finds opposite policy rule recommandations … with counter-cyclical policy rule parameters (Taylor principle: inflation rule larger than one and bounded upwards) in the … case of optimal policy under commitment versus pro-cyclical policy rule parameters (inflation rule parameter below zero) in …
Persistent link: https://www.econbiz.de/10011444004
We construct the first algorithm for the perfect foresight solution of otherwise linear models with occasionally binding constraints, with fixed terminal conditions, that is guaranteed to return a solution in finite time, if one exists. We also provide a proof of the inescapability of the...
Persistent link: https://www.econbiz.de/10011514628
This paper investigates the relevance of the No-Ponzi game condition for public debt (i.e. the public debt growth rate has to be lower than the real interest rate, a necessary assumption for Ricardian equivalence) and of the transversality condition for the GDP growth rate (i.e. the GDP growth...
Persistent link: https://www.econbiz.de/10010311966
response to inflation in the central bank policy rule yield the lowest welfare losses. The findings emphasize the importance of …
Persistent link: https://www.econbiz.de/10010335198
We present a model in which banks and other financial intermediaries face both occasionally binding borrowing constraints, and costs of equity issuance. Near the steady state, these intermediaries can raise equity finance at no cost through retained earnings. However, even moderately large...
Persistent link: https://www.econbiz.de/10011719158
We introduce a pro-cyclical endogenous utilization rate of physical capital stock into a real-business-cycle model augmented with a detailed government sector. We calibrate the model to Bulgarian data for the period following the introduction of the currency board arrangement (1999-2016). We...
Persistent link: https://www.econbiz.de/10011786877
We augment an otherwise standard business cycle model with a richer government sector, and add monopolistic competition in the product market, and rigid prices, as well as rigid wages a la Calvo (1983) in the labor market. This specification with the nominal wage rigidity, when calibrated to...
Persistent link: https://www.econbiz.de/10011796105
Applying the Bayesian approach, a small open economy DSGE model was estimated using a sample of quarterly data for a macro-region formed by six Central Europe and Baltic economies: Czech Republic, Estonia, Hungary, Lithuania, Poland, and Slovakia. Estimates have been employed to investigate the...
Persistent link: https://www.econbiz.de/10011796609
We introduce an environmental dimension into a real-business-cycle model augmented with a detailed government sector. We calibrate the model to Bulgarian data for the period following the introduction of the currency board arrangement (1999-2016). We investigate the quantitative importance of...
Persistent link: https://www.econbiz.de/10011803438