The 2008-2009 global recession, which originated in developed economies, has rapidly spilled over worldwide, hitting different economies with various intensity. The Macedonian economy was not an exception - the export sector suffered heavily, expectations deteriorated and household consumption...

In most countries, the central bank is required to hold reserve assets as a means of providing credibility for the value of the fiat currency. These assets can be in the form of gold, foreign exchange or some other internationally recognised reserve asset and are held to permit the country to...

In this paper, we argue that differences in the cost structures across sectors play an important role in firms' decisions to adjust their prices. We develop a menu-cost model of pricing in which retail firms intermediate trade between producers and consumers. An important facet of our analysis...

Global games with endogenous information often exhibit multiple equilibria. In this paper we show how one can nevertheless identify useful predictions that are robust across all equilibria and that could not have been delivered in the common-knowledge counterparts of these games. Our analysis is...

The global financial crisis and the dramatic slump in private capital flows associated with it has particularly affected the economies of the Baltic countries. The real gross domestic product decreased in the first half of 2009 in Latvia by 18.8 percent, in Estonia by 15.7 percent and in...

Die globale Finanzkrise und der damit verbundene dramatische Einbruch der privaten Kapitalflüsse hat die Volkswirtschaften der baltischen Länder in besonderem Maße getroffen. Das reale Bruttoinlandsprodukt ist im ersten Halbjahr 2009 in Lettland um 18,8 Prozent, in Estland um 15,7 Prozent und...

This paper analyzes the integration process of European equity markets since the 1980s. Its central focus is on the role that EMU, and specifically, changes in exchange rate volatility, has played in this process of financial integration. Building on an uncovered interest rate parity condition...

We characterize asset return linkages during periods of stress by an extremal dependence measure. Contrary to correlation analysis, this non-parametric measure is not predisposed towards the normal distribution and can account for non-linear relationships. Our estimates for the G-5 countries...

This paper builds a baseline two-country model of real and monetary transmission under optimal international proce discrimination. Distributing traded goods to consumers reuires nontradables; because of distributive trade, the proce elasticity of export demand depends on the exchange rate....