The bargaining power of international banks is currently still very high as compared to what it was at the time of the Bretton Woods conference. As a consequence, systemic financial crises are likely to remain recurrent phenomena with large effects on macroeconomic aggregates. Mainstream...

Central banks are at the epicenter of the current crisis. Accused of starting the crisis or, conversely, praised for having worked to overcome it, central banks need to draw conclusions stemming from the global crisis and to undertake necessary reforms. At present, when the crisis appears to be...

In this paper, we review the macroeconomic literature on financial frictions and banking in a dynamic general equilibrium framework. Our work focuses first on the pioneer articles that have analyzed the amplification effects associated to the financial accelerator. We then shift our attention...

This paper constructs and estimates a sticky-price, Dynamic Stochastic General Equilibrium model with heterogenous production sectors. Sectors differ in price stickiness, capital-adjustment costs and production technology, and use output from each other as material and investment inputs...

We investigate the transmission mechanism of monetary policy in China over the past decades with emphasis on the post-Asian crisis period. A factor-augmented VAR method is used to study the effectiveness of monetary policy instruments in stabilizing the Chinese economy. We find that repo rate,...

The Bundesbank and the Banque de France held their third joint conference on 19 and 20 May 2011 in Hamburg. The conference was devoted to the challenges that macroeconomic policy – in the form of monetary, fi scal and tax policy – must address in the short and long run.