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We study a model in which policy aims at aggregate price stability. A fiscal imbalance materializes that, if uncorrected, must cause inflation, but the imbalance may get corrected in the future with some probability. By maintaining price stability in the near term, monetary policy can buy time...
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Sovereign risk premia in several euro area countries have risen markedly since 2008, driving up credit spreads in the … channel.” The model is calibrated to the euro area as of mid-2012. We show that a combination of sovereign risk in one region …
Persistent link: https://www.econbiz.de/10013071921
Sovereign risk premia in several euro area countries have risen markedly since 2008, driving up credit spreads in the … channel.” The model is calibrated to the euro area as of mid-2012. We show that a combination of sovereign risk in one region …
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