We extract and analyse financial cycles for 13 European Union countries using a quarterly dataset spanning over 1971-2013. For identification of financial cycles, we employ a novel spectral approach determining the most important common cyclical fluctuations across total credit, residential...

Using the introduction of the euro as a natural experiment, we provide economy-wide evidence for money illusion based on declared donations from German administrative income tax data. Our results suggest a magnitude of the money illusion effect between 2.4% and 7.6%. Compared to previous studies...

This paper describes segregated balance accounts (SBAs), a concept for a new type of account that could provide increased competition for deposits, reduce system-wide balance sheet costs, and improve the transmission of monetary policy by facilitating greater pass-through of interest on excess...

Using a sign restrictions approach, we document that total factor productivity (TFP) moves counter-cyclically in the aftermath of supply and demand side shocks. To interpret our empirical results, we conduct counter-factual simulations, based on a New Keynesian DSGE model in which TFP fluctuates...

This paper focuses on how political regimes affect financial development in Africa, contingent on religious-domination, income-levels and colonial-legacies. The main findings are summarized as follows. Authoritarian regimes have a higher propensity to effect policies that favour the development...

We develop a dynamic general equilibrium model to analyze the effects of central bank purchases of government bonds by investigating the following three questions: Under what conditions are these purchases socially desirable, what incentive problems do they mitigate, and how large are these...

Türkiye'de son birkaç yıldır en çok tartışılan konulardan biri faiz oranı ile döviz kuru arasındaki ilişkidir. Bazı iktisatçılar döviz kurlarının uzun süredir yerinde saymasının nedenini faiz oranlarının yüksekliğine bağlamakta ve Merkez Bankası'nın kısa vadeli faiz...

This paper presents and estimates a dynamic stochastic general equilibrium (DSGE) small-open-economy model for the Hungarian economy. The model features different types of frictions, real and nominal rigidities which are necessary to replicate the empirical persistence of Hungarian data....

A growing body of empirical evidence shows that there exists a long-run positive tradeoff between inflation and real macroeconomic activity. Within a New Keynesian framewok, we examine how increasing returns generate a positive long-run relation between inflation and output.

Using a unique dataset collected through a well-established survey, which was carried out in China, we examine whether Chinese individuals are prone to money illusion. In contrast to the outcomes for US individuals, we find that the Chinese are more likely to base decisions on the real monetary...