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Full-Text Articles in Economics
U.S. Monetary Policy: Qe3, Warren Coats
U.S. Monetary Policy: Qe3, Warren Coats
Warren Coats
The Federal Reserve’s latest round of quantitative easing (QE3) is not likely to help the U.S. economy’s recovery, which is already underway, but increases the risks of new asset bubbles and inflation.
Monetary Policy Games, Instability And Incomplete Information, Somnath Sen Professor
Monetary Policy Games, Instability And Incomplete Information, Somnath Sen Professor
Somnath Sen
Abstract: Central banks, in executing monetary policy, while pursuing traditional objectives, such as the control of inflation, may try also to promote financial stability. In this paper, we explore a simple monetary policy game played between the central bank and the financial sector. The central bank can be of two types, one traditional and the other concerned with controlling the financial markets; however, the financial sector is unsure which, due to incomplete information. The conclusion of the paper is that for small shocks to inflation there is a pooling equilibrium, whereas for larger shocks there is separation. In the latter …
Exports And Foreign Direct Investments In An Endogenous-Entry Model, Lilia Cavallari
Exports And Foreign Direct Investments In An Endogenous-Entry Model, Lilia Cavallari
Lilia Cavallari
Drawing on a tractable DSGE model with nominal rigidity, this paper studies the implications of firms’ entry in domestic and foreign markets for the international business cycle. The paper shows that the decision to enter a new market as well as the choice whether to invest at home or abroad depend on global monetary and productivity conditions. I find that a domestic monetary expansion might favor or deter start-up investments, depending on whether the potential entrant is a national or a multinational firm. Moreover, a structural policy change, as an increase in the degree of monetary stabilization, has a positive …
Role Of The Central Bank Of Iraq In Implimenting Monetary Policy, Warren Coats
Role Of The Central Bank Of Iraq In Implimenting Monetary Policy, Warren Coats
Warren Coats
Outlines the monetary policy regime in place in the Central Bank of Iraq and its operation following the replacement of the Baathist government in 2003
Monetary Policy Issues In Post Conflict Economies, Warren Coats
Monetary Policy Issues In Post Conflict Economies, Warren Coats
Warren Coats
Post conflict environments differ considerably depending on the factors that started and brought conflict to an end, the extent of damage to infrastructure and institutions, and the nature of post conflict governance. Many post conflict countries suffer from ethnic and/or religious divisions and animosities deepened by civil war (Bosnia and Herzegovina, Kosovo, Afghanistan, Iraq). Since the collapse of the Soviet Union, all post conflict territories that have received assistance with their reconstruction from international financial institutions have sought to establish or reestablish market based economies to varying degrees. Most had relatively highly centralized economies prior to the conflict. Thus reestablishment …
Basel Accord And Financial Intermediation: The Impact Of Policy, Martin Berka, Christian Zimmermann
Basel Accord And Financial Intermediation: The Impact Of Policy, Martin Berka, Christian Zimmermann
Martin Berka
This paper studies loan activity in a context where banks have to follow Basel Accord type rules and need to find financing with the households. Loan activity typically decreases when investment returns of entrepreneurs decline, and we study which type of policy could revigorate an economy in a trough. We find that active monetary policy increases loan volume even when the economy is in a good shape, while introducing active capital requirement policy can be effective as well if it implies tightening of regulation in bad times. This is performed with an heterogeneous agent economy with occupational choice, financial intermediation …
A Reappraisal Of The Inflation-Unemployment Tradeoff, Marika Karanassou, Hector Sala, Dennis Snower
A Reappraisal Of The Inflation-Unemployment Tradeoff, Marika Karanassou, Hector Sala, Dennis Snower
Dennis Snower
This paper offers a reappraisal of the inflation-unemployment tradeoff, based on "frictional growth", describing the interplay between nominal frictions and money growth. Whe the money supply growth in the presence of price inertia (due to staggered wage contracts with time discounting), the price adjustments to each successive change in the money supply are never able to work themselves out fully. In this context, temporary nominal rigidities let monetary policy have permanent real effects. Although our theory contains no money illusion, no permanent nominal rigidities, and no departure from rational expectations, there is a long-run inflation-unemployment tradeoff. Our empirical analysis suggests …
Bank Lending And The Effectiveness Of Monetary Policy Under A Revised Basel Accord, Kevin T. Jacques, David Schirm
Bank Lending And The Effectiveness Of Monetary Policy Under A Revised Basel Accord, Kevin T. Jacques, David Schirm
Kevin T Jacques
No abstract provided.
Long-Run Inflation-Unemployment Dynamics: The Spanish Phillips Curve And Economic Policy, Marika Karanassou, Hector Sala, Dennis Snower
Long-Run Inflation-Unemployment Dynamics: The Spanish Phillips Curve And Economic Policy, Marika Karanassou, Hector Sala, Dennis Snower
Dennis Snower
This paper takes a new look at the long-run dynamics of inflation and unemployment in response to permanent changes in the growth rate of the money supply. We examine the Phillips curve from the perspective of what we call “frictional growth”, i.e. the interaction between money growth and nominal frictions. After presenting theoretical models of this phenomenon, we construct an empirical model of the Spanish economy and, in this context, we evaluate the long-run in‡ation-unemployment tradeo¤ for Spain and examine how recent policy changes have a¤ected it.
The Return Of The Long-Run Phillips Curve, Liam Graham, Dennis Snower
The Return Of The Long-Run Phillips Curve, Liam Graham, Dennis Snower
Dennis Snower
This paper shows that the interaction between money growth and staggered nominal contracts gives rise to a long-run inflation-unemployment tradeoff.
An Anatomy Of The Phillips Curve, Marika Karanassou, Hector Sala, Dennis Snower
An Anatomy Of The Phillips Curve, Marika Karanassou, Hector Sala, Dennis Snower
Dennis Snower
The paper examines how the long-run inflation-unemployment tradeoff depends on the degree to which wage-price decisions are backward- versus forward-looking. When economic agents, facing time-contingent, staggered nominal contracts, have a positive rate of time preference, the current wage and price levels depend more heavily on past variables (e.g. past wages and prices) than on future variables. Consequently, the long-run Phillips curve becomes downward-sloping and, indeed, quit flat for plausible parameter values. This paper provides an intuitive account of how this long-run Phillips curve arises.
Applied Monetary Policy And Bank Supervision By The Ecb, Mads Andenas, Lazaros E. Panourgias
Applied Monetary Policy And Bank Supervision By The Ecb, Mads Andenas, Lazaros E. Panourgias
Mads Andenas
Monetary policy and banking supervision are closely related and interdependent concepts. Monetary policy and central banking are not defined in such a manner in the Maastricht Treaty that it precludes the European Central Bank from taking on a wider responsibility for financial stability and the handling of banking crises. The article introduced the term 'macro-prudential supervision', explained as 'supervision with a view to safeguarding systemic stability', in a section with the heading 'Default Supervision of Central Banks'.
Credit Crunch As An Optimal Decision Of Risk-Averse Banks Under Uncertainty., Martin Berka
Credit Crunch As An Optimal Decision Of Risk-Averse Banks Under Uncertainty., Martin Berka
Martin Berka
No abstract provided.