This paper analyzes jointly optimal fiscal and monetary policies in a small open economy with capital and sticky prices. We allow for trade in consumption goods under perfect international risk sharing. We consider balanced-budget fiscal policies where authorities use distortionary taxes on...

This paper examines if taking into account changes in the number of producers, or equivalently changes in the product variety space over the business cycle, helps to understand and replicate international business cycle facts. To this end, we develop a two-country model in which the economy is...

This paper examines if taking into account changes in the number of producers, or equivalently changes in the product variety space over the business cycle, helps to understand and replicate international business cycle facts. To this end, we develop a two-country model in which the economy is...

This paper analyzes jointly optimal fiscal and monetary policies in a small open economy with capital and sticky prices. We allow for trade in consumption goods under perfect international risk sharing. We consider balanced-budget fiscal policies where authorities use distortionary taxes on...

This paper examines if taking into account changes in the number of producers, or equivalently changes in the product variety space over the business cycle, helps to understand and replicate international business cycle facts. To this end, we develop a two-country model in which the economy is...

This paper shows that financial market incompleteness leads to welfare gains in a monetary union where nominal rigidities and asymmetric shocks do exist. Incomplete financial markets reduce the volatility of the national inflation rates. Welfare gains associated with this decrease are higher...

This paper evaluates the welfare gains arising from a deeper trade integration in the European Monetary Union. To do this, the European Monetary Union is represented in a realistic way by an intertemporal general equilibrium model with incomplete financial markets, sticky prices and home bias...

Cet article étudie la manière dont la politique monétaire doit être conduite en économie ouverte lorsque l'on prend en compte son influence sur la marge extensive de l'activité. Dans un modèle à deux pays, on montre que, contrairement aux résultats obtenus par Bilbiie, Ghironi et...

[eng] This article examines how monetary policy should be conducted in an open economy when its influence on the extensive margin of trade is taken into account. In a two-country model, we show that – contrary to the results obtained by Bilbiie et alii (2007 ) – the optimal monetary policy...

We analyze the effects of large war episodes (world wars) on the macroeconomic dynamics of four advanced countries (France, Germany, the UK and the U.S.) using a structural small open economy model estimated with Bayesian techniques. Our dataset is taken from Piketty and Zucman (2014) and goes...