Motivated by the events of the Great Recession, we estimate a time-varying structural VAR model to analyze the effects of a financial shock on the labor market, focusing on the US. Our results indicate that a tightening of financial conditions is highly detrimental to the labor market. Moreover,...

Are capital controls and macroprudential measures desirable in an emerging economy? How do these instruments interact with monetary policy? I address these questions in a DSGE model for an emerging economy whose banks are indebted in foreign currency. The model is augmented with financial...

We analyse a gradual increase in the tax on emissions in a simple two-period New Keynesian model with an AS-AD representation. We find that the increase in the tax today exerts inflationary pressures, but the expected further increase in the tax tomorrow depresses current demand, putting...

A DSGE model is developed to study the interaction between capital controls, macroprudential measures and monetary policy in an emerging economy. The main results are as follows. First, capital controls and macroprudential policies are able to mitigate the adverse effects of an increase in the...

In the last decade, some emerging economies have imposed capital controls to reduce the volatility of capital flows and to manage the exchange rate. However, a capital controls tightening in some countries is likely to deflect capital flows to other countries with no controls in place. In this...

We use a DSGE model to study the effectiveness of green-asset purchases by the central bank (Green QE), along the transition to a carbon-free economy driven by an emission tax, abstracting from price stability considerations. We find that Green QE helps to further reduce emissions, especially in...