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On the Economic Crisis and the Crisis of Economics

Beker, Victor A. - 2010

The outburst of the 2008 global economic crisis sparked myriad criticism on mainstream neoclassical economic theory, which is blamed for not even have considered the possibility of the kind of collapse that the subprime mortgage meltdown unleashed. In this paper, it is argued that what happened...

Persistent link: https://www.econbiz.de/10013134875

Sovereign Risk and Macroeconomic Fluctuations in an Emerging Market Economy

Kirchner, Markus - 2010

This paper assesses the role of sovereign risk in explaining macroeconomic fluctuations in Turkey. We estimate two versions of a simple New Keynesian small open economy model on quarterly data for the period 1994Q3-2008Q2: A basic version and a version augmented by a default premium on...

Persistent link: https://www.econbiz.de/10013137196

An Iberian Disease? On Current Account Imbalances Within a Monetary Union

Coimbra, Nuno - 2010

During the process of accession to the Eurozone, some member countries experienced a rapid increase in credit availability fueled by the fast convergence of interest rates. This was accompanied by large current account deficits and booms in the housing sector. This paper argues that these...

Persistent link: https://www.econbiz.de/10013137267

Monetary Policy with Heterogeneous Agents

Gornemann, Nils - 2012

We build a New Keynesian model in which heterogeneous workers differ with regard to their employment status due to search and matching frictions in the labor market, their potential labor income, and their amount of savings. We use this laboratory to quantitatively assess who stands to win or...

Persistent link: https://www.econbiz.de/10013100607

Cascading Failures in Production Networks

Baqaee, David - 2017

The interaction of input-output networks with industrial structure affects the propagation and amplification of shocks, and is an important consideration for business cycle fluctuations. This paper shows how the extensive margin of entry and exit can greatly amplify idiosyncratic shocks in the...

Persistent link: https://www.econbiz.de/10012964179

News Shocks

Barsky, Robert - 2009

We implement a new approach for the identification of news shocks about future technology. In a VAR featuring a measure … of aggregate technology and several forward-looking variables, we identify the news shock as the shock orthogonal to … technology innovations that best explains future variation in technology. In the data, news shocks account for the bulk of low …

Persistent link: https://www.econbiz.de/10013156463

Ensuring the Validity of the Micro Foundation in DSGE Models

Andreasen, Martin M. - 2008

The presence of i) stochastic trends, ii) deterministic trends, and/or iii) stochastic volatility in DSGE models may imply that the agents' objective functions attain infinite values. We say that such models do not have a valid micro foundation. The paper derives sufficient conditions which...

Persistent link: https://www.econbiz.de/10012723986

Post-Crisis Recovery : When Does Increased Fiscal Discipline Work?

Mitra, Pritha - 2006

Emerging market financial crises during the late 1990s were marked by sudden withdrawals of funds by foreign creditors, resulting in production declines. The IMF favored positive signals to potential foreign creditors and initially recommended disciplined fiscal policy during the height of...

Persistent link: https://www.econbiz.de/10012779170

Nominal Income and the Inflation-Growth Divide

Chand, Sheetal - 2006

This paper deals with aggregate demand fluctuations and their price and output effects. Starting with a nominal income solution, a rule for determining the inflation and output growth effects is presented. Assigning alternative values to the key parameters of the suggested rule generates...

Persistent link: https://www.econbiz.de/10012782133

An ARDL Approach on Crude Oil Price and Macroeconomic Variables

Phoong, Seuk Wai - 2019

Objective - The removal of fuel subsidies by the Malaysian government in 2014 has been implement with the managed float system for fuel prices.Methodology/Technique - This study investigates the impact of the managed floating system of crude oil prices on the Malaysian economy using ARDL...

Persistent link: https://www.econbiz.de/10012889606

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