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Modelling the Eurozone as an Extraordinary Exchange Rate Union

Sauer, Beate; Sell, Friedrich; Werner, Thomas - In: International Advances in Economic Research 20 (2014) 4, pp. 357-367

The Trans-European Automated Real-Time Gross settlement Express Transfer system (TARGET) imbalances within the Eurozone … Eurozone lacks a fiscal union, in theory it is more of an exchange rate union or a system of fixed exchange rates than a … monetary union. This paper will show why the TARGET is a crucial indicator for the Eurozone not being a monetary union but …

Persistent link: https://www.econbiz.de/10011155158

International Risk-Sharing and the Exchange Rate: Re-evaluating the Case for Flexible Exchange Rates

Devereux, Michael B - C.E.P.R. Discussion Papers - 2001

A classic argument for flexible exchange rates is that the exchange rate plays a ‘shock-absorber' role in an open economy hit by country specific shocks. This Paper presents a sharp counterexample to this argument within a very simple open economy model. Countries are subject to unpredictable...

Persistent link: https://www.econbiz.de/10005791293

Is the European debt crisis a mere balance of payments crisis?

Guerreiro, David - In: Economic Modelling 44 (2014) S1, pp. 50-50

This paper is interested in linking formally external disequilibrium to the sovereign debt crisis which the EMU is experiencing since 2009. Relying on the CHEER approach that connects the goods market to the capital market, we show that when a country belonging to a monetary union faces external...

Persistent link: https://www.econbiz.de/10011077125

How the Euro Crisis Evolved and how to Avoid Another: EMU, Fiscal Policy and Credit Ratings

Polito, Vito; Wickens, Michael - In: Journal of Macroeconomics 39 (2014) PB, pp. 364-374

This paper argues that the crisis was an outcome of EMU: setting a common monetary policy for countries with different initial inflation rates. The crisis countries were those with high inflation rates which then had negative real interest rates and consequently over-borrowed. Current policy...

Persistent link: https://www.econbiz.de/10010786706

Monetary Policy, Currency Unions and Open Economy Macrodynamics

Asada, Toichiro; Flaschel, Peter; Gong, Gang; Semmler, Willi - In: Bulletin of the Czech Econometric Society 10 (2003)

In this paper we extend an integrated closed-economy macrodynamic model to account for a large open economy in a currency area with fixed nominal exchange rates between the currencies. The major issues are the effectiveness and macrodynamic effects of monetary policy for countries in a pegged or...

Persistent link: https://www.econbiz.de/10008528841

Macroeconomic Stabilization: Fixed Exchange Rates Vs Inflation Targeting Vs Price Level Targeting

Dehejia, Vivek; Rowe, Nicholas - C.E.P.R. Discussion Papers - 2000

We argue that the traditional question 'fixed vs. flexible exchange rates?' is not well-defined, because 'flexible exchange rates' does not explicitly specify any particular monetary policy. In traditional analyses, 'flexible exchange rates' was interpreted as implying a fixed money supply. But...

Persistent link: https://www.econbiz.de/10005124168

Currency demand, new technology, and the adoption of electronic money: Micro evidence from Japan

Fujiki, Hiroshi; Tanaka, Migiwa - In: Economics Letters 125 (2014) 1, pp. 5-8

We estimate currency demand functions conditional on electronic money adoption with household-level survey data from Japan under an Instrumental Quantile Regression framework. Contrary to theoretical predictions, our results suggest that users of electronic money hold more currency than non-users.

Persistent link: https://www.econbiz.de/10010939506

Is gold an efficient store of value?

Dubey, Pradeep; Geanakoplos, John; Shubik, Martin - In: Economic Theory 21 (2003) 4, pp. 767-782

Gold and tobacco have both been used as commodity money. One difference between the two is that gold yields utility, on account of its beauty, without diminishing its quantity. Tobacco yields utility when it is consumed. If this were the only difference, Copyright Springer-Verlag Berlin...

Persistent link: https://www.econbiz.de/10005147351

Adoption of Financial Technologies: Implications for Money Demand and Monetary Policy

Mulligan, Casey; Sala-i-Martin, Xavier - National Bureau of Economic Research (NBER) - 1996

In this paper we argue that the relevant decision for the majority of US households is not the fraction of assets to be held in interest bearing form, but whether to hold any of such assets at all (we call this `the decision to adopt' the financial technology). We show that the key variable...

Persistent link: https://www.econbiz.de/10005710154

Money and the Size of Transactions

Zeira, Joseph - C.E.P.R. Discussion Papers - 2005

Consumers make transactions of different sizes over time. This paper shows that this fact, together with transaction costs of various assets, can help in developing a theory of liquidity. Assets with different cost structures are used to purchase different sizes of transactions. This can explain...

Persistent link: https://www.econbiz.de/10005666420