The paper employs a recently developed procedure, based on a bivariate Markov switching model, to analyze the asymmetric causality linkages between credit growth and output growth during banking crises. Using a sample of 103 banking crises, we find that neither credit nor output leads the other...

The validity of discretionary fiscal policy in a recession will differ according to the cause and mechanism of recession. In this paper, discretionary fiscal policy in a recession caused by a fundamental shock that changes the steady state downwards is examined. In such a recession, households...

Attempts to establish a link between inflation and economic growth are made quite regularly. The aim of such attempts is not only to determine the impact of inflation on economic growth but also to assess efficiency of the inflation rein-in policy, for example, the policy of inflation targeting....

In this paper we present a framework showing how governments use debt to flaunt competency and increase their votes and the chances of reelection; however, a cognitive bias, namely, the cyclist bias, would disrupt government’s computations. In this model the government’s budget deficit as...

In this paper, we estimate a DSGE model for the national economy, which also draws on the unique economic characteristics of the country. The empirical estimation is based on quarterly data and taking into account the short length of the time series for the national economy Bayesian estimation...

The net, positive, effect of unemployment at conception on birth outcomes in developed countries is likely overestimated in the literature. This is the consequence of ignoring the effects of unemployment during pregnancy. Using data from Israel, we not only confirm this finding but also find...

Attempts to establish a link between inflation and economic growth are made quite regularly. The aim of such attempts is not only to determine the impact of inflation on economic growth but also to assess efficiency of the inflation rein-in policy, for example, the policy of inflation targeting....

We study the effects of monetary policy on economic activity separately identifying the effects of a conventional change in the fed funds rate from the policy of forward guidance. We use a structural VAR identified using external instruments from futures market data. The response of output to a...

In this paper we utilize a multivariate STSM model in order to estimate trend and cyclical components on a set of business and financial economic variables for Slovenia. The results show that financial cycles are somewhat longer compared to business cycles. Comparing the standard deviations of...

This paper sets up a small open economy general equilibrium model operating in a monetary union. Exogenous oil-price shocks affecting the modelled economy are alleviated by introducing a pro-cyclical excise duty tax rule on oil prices. The paper provides a model-based theoretical background for...