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A finite set of equilibria for the indeterminacy of linear rational expectations models

Chatelain, Jean-Bernard; Ralf, Kirsten - 2014

This paper demonstrates the existence of a finite set of equilibria in the case of the indeterminacy of linear rational expectations models. The number of equilibria corresponds to the number of ways to select n eigenvectors among a larger set of eigenvectors related to stable eigenvalues. A...

Persistent link: https://www.econbiz.de/10010378075

Straight-time and Overtime: A Sequential-Lottery Approach

Vasilev, Aleksandar - 2015

This note explores the problem of aggregation with non-convex labor supply decisions in an economy with both straight time and overtime. In contrast to Hansen and Sargent (1988), the paper models this as a sequential decision. Instead of changing from one to infinity, with a sequential...

Persistent link: https://www.econbiz.de/10011490652

Endogenizing Total Factor Productivity: The Foreign Direct Investment channel in the case of Bulgaria (2004-2013)

Pesheva, Milena; Vasilev, Aleksandar - 2016

This paper estimates the contribution of Foreign Direct Investment (FDI) to the Total Factor Productivity (TFP) of Bulgaria for the period 2004-2013. Since TFP captures the joint efficiency of capital and labor, it is likely to be influenced by investments from abroad. As predicted by theory, a...

Persistent link: https://www.econbiz.de/10011504616

Hopf Bifurcation from new-Keynesian Taylor rule to Ramsey Optimal Policy

Chatelain, Jean-Bernard; Ralf, Kirsten - 2017

This paper shows that a shift from Ramsey optimal policy under short term commitment (based on a negative-feedback mechanism) to a Taylor rule (based on positive-feedback mechanism) in the new-Keynesian model is in fact a Hopf bifurcation, with opposite policy advice. The number of stable...

Persistent link: https://www.econbiz.de/10011648120

Existence, uniqueness and computation of solutions to dynamic models with occasionally binding constraints

Holden, Tom D. - 2016

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

A Simple Algorithm for Solving Ramsey Optimal Policy with Exogenous Forcing Variables

Chatelain, Jean-Bernard; Ralf, Kirsten - 2017

This algorithm extends Ljungqvist and Sargent (2012) algorithm of Stackelberg dynamic game to the case of dynamic stochastic general equilibrium models including exogenous forcing variables. It is based Anderson, Hansen, McGrattan, Sargent (1996) discounted augmented linear quadratic regulator....

Persistent link: https://www.econbiz.de/10011710384

Stability and Identification with Optimal Macroprudential Policy Rules

Chatelain, Jean-Bernard; Ralf, Kirsten - 2014

This paper investigates the identification, the determinacy and the stability of ad hoc, "quasi-optimal" and optimal … policy rules augmented with financial stability indicators (such as asset prices deviations from their fundamental values …) and minimizing the volatility of the policy interest rates, when the central bank precommits to financial stability …

Persistent link: https://www.econbiz.de/10010335949

Precautionary Liquidity Shocks, Excess Reserves and Business Cycles

Bratsiotis, George J.; Theodoridis, Konstantinos - 2021

This paper identifies a precautionary banking liquidity shock via a set of sign, zero and forecast variance restrictions imposed. The shock proxies the banking sector's reluctance to lend to the real economy induced by an exogenous preference change for liquid assets. Through the lens of a DSGE...

Persistent link: https://www.econbiz.de/10012632159

Effect of Economic Uncertainty on Remittances Flows from Developed Countries

Gnangnon, Sèna Kimm - 2023

This article has investigated the effect of economic uncertainty on the remittances sent by migrants residing in developed countries to their home countries. The analysis builds on the economic uncertainty index developed by Ahir et al. (2018, 2019, 2022) that reflects the uncertainty related to...

Persistent link: https://www.econbiz.de/10014417643

Keeping up with the Joneses: Other-regarding Preferences and Endogenous Growth

Petach, Luke; Tavani, Daniele - 2017

We study a series of sustained growth models in which households' preferences are affected by the consumption of other households as summarized by average consumption. In endogenous growth models, the equilibrium paths involve lower savings and lower growth than the corresponding efficient...

Persistent link: https://www.econbiz.de/10011731454