This paper studies the role of narratives for macroeconomic fluctuations. We micro-found narratives as directed acyclic graphs and show how exposure to different narratives can affect expectations in an otherwise standard macroeconomic model. We capture such competing narratives in news media's...

The COVID-19 pandemic has had systemic macroeconomic impacts due to the different lockdowns and the induced shocks to both supply and demand. A global recession of a magnitude probably worse than the 2008 global financial crisis is already underway. Like every country in the world, the...

The level of causation and interdependencies among three commodities (cocoa, gold, and Brent crude oil), five banking sector performance indicators (Capital Adequacy Ratio (CAR), Non-Performing Loans (NPL), Return on Equity (ROE), Return on Assets (ROA) and Core Liquid assets to total assets...

We introduce Behavioral Learning Equilibria (BLE) into a multivariate linear framework and apply it to New Keynesian DSGE models. In a BLE, boundedly rational agents use simple, but optimal AR(1) forecasting rules whose parameters are consistent with the observed sample mean and autocorrelation...

One of the main reasons to dollarize an emerging market economy is to eliminate high, persistent, and volatile inflation. To be effective, dollarization must generate sufficient credibility, which in turn depends critically on whether its expected probability of reversal is low. Argentina once...

In this paper we examine how the balance-of-payments constraint can limit output and income distribution in a small economy open to both commercial and financial flows, as well as constrain fiscal and monetary policies. We do so by extending a Sraffian supermultiplier growth model to consider...

In this paper we examine how the balance-of-payments constraint can limit output and income distribution in a small economy open to both commercial and financial flows, as well as constrain fiscal and monetary policies. We do so by extending a Sraffian supermultiplier growth model to consider...

The debate on the effectiveness of monetary policy in developing countries remains open. We shed new light on this issue by examining whether managers' perceptions of financial constraints are shaped after a change in monetary policy. Our analysis shows that managers are more likely to report...

The debate on the effectiveness of monetary policy in developing countries remains open. We shed new light on this issue by examining whether managers' perceptions of financial constraints are shaped after a change in monetary policy. Our analysis shows that managers are more likely to report...