We present a simple macroeconomic model with open market operations that allows examining the effects of quantitative and credit easing. The central bank controls the policy rate, i.e. the price of money in open market operations, as well as the amount and the type of assets that are accepted as...

Empirical data indicate that firms tend to have below-average productivity upon entry and that they tend to experience post-entry productivity growth. I present a New Keynesian model with growth in firm-specific productivity and firm turnover that captures these two phenomena. The model predicts...

This article was started with the theoretical approach of the general economic crisis, the increase/decrease model, by using the process of the money becoming, merchandise money and fiat money. During the time of fiat money there was a break between the material substances from the symbolic...

In this paper we wish to point out that some measures taken by the government to reduce budget deficits in times of economic crisis have the opposite effect, i.e. widening budget deficit. In Romania’s case the measures are focused on increased taxation and reducing public spending instead of...

Economic theory suggests that the degree of cyclical synchronisation is related to the degree of economic integration and structural similarity between countries. In gauging changes in the synchronisation of countries’ business cycles and the underlying driving factors, it is important to...

This paper intends to perform a simple impulse-response analysis on the Romanian economy with the help of a DSGE model. The DSGE methodology has its origins in the Real Business Cycle Theory, and recently it became quite popular, especially after the seminal contribution of Smets and Wouters...

In recent times people have been speaking more often about the global economic and financial crisis and the effects it has on the economies of the world’s states. Countries with strong economies such as the USA, Japan or the developed countries in Europe have suffered from the global crisis,...

Are fluctuations in firms' profitability risk a major cause of regular business cycles? We study this question within the framework of a heterogeneous-firm dynamic stochastic general equilibrium model with fixed capital adjustment costs. In such a model, surprise increases of risk lead to a...

We document a new business cycle fact: the cross-sectional standard deviation of firm-level investment (investment dispersion) is robustly and significantly procyclical. This makes investment dispersion different from the dispersion of productivity and output growth, which is countercyclical....

We characterize efficient allocations and business cycle fluctuations in a labor selection model. Due to forward-looking hiring and labor supply decisions, efficiency entails both static and intertemporal margins. We develop welfare-relevant measures of marginal rates of transformation and...