This paper develops a non-linear DSGE model to assess the interaction between ex-post interventions in credit markets and the build-up of risk ex ante. During a systemic crisis, bailouts relax balance sheet constraints and mitigate the severity of the recession. Ex ante, the anticipation of such...

In this article the author recounts some fond memories of Franco Modigliani. For depth, breadth, originality and human wisdom, Modigliani gained in the ranking of scholars, the highest place of the twentieth century. Great Italian, great American economist, Franco was also one of the leading...

In this article the author recounts some fond memories of Franco Modigliani. For depth, breadth, originality and Modigliani human wisdom gained in the ranking of scholars, the highest place of the twentieth century. Great Italian, great American economist, Franco was also one of the leading...

In this article the author recounts some fond memories of Franco Modigliani. For depth, breadth, originality and Modigliani human wisdom gained in the ranking of scholars, the highest place of the twentieth century. Great Italian, great American economist, Franco was also one of the leading...

According to the textbook Keynesian model, short-run demand for labor is sensitive to the demand for goods. In this view, sellers deviate from setting the marginal product of labor proportional to the real wage, instead enduring or choosing lower price markups when demand for goods is high. We...

How does the output response to a change in government spending vary over the business cycle? What are the welfare effects of spending shocks? This paper studies the state-dependence of the output and welfare effects of shocks to government purchases in a DSGE model with real and nominal...

A “lost decade” refers to an extended period of low or negative growth triggered by an economic crisis and that could have been avoided by the use of efficient crisis policies. The risk to the world’s developed economies of a lost decade was highlighted early on in the 2007-2008 crisis....

We study economic growth and inflation at different levels of government and external debt. Our analysis is based on new data on forty-four countries spanning about two hundred years. The dataset incorporates over 3,700 annual observations covering a wide range of political systems,...

The macromodel estimates the short and medium-term economic implications of the internal policies and the international environment. This version of the Romanian macromodel incorporates the experience accumulated through the utilisation of its previous forms - either experimental (tested during...

Some economic observers argue “structural unemployment” has increased in the wake of the Great Recession, but in this paper we find little support for either of two arguments that suggest that structural unemployment has been on the rise. The first argument focuses on the large increase in...