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Has the Eurozone Become Less Fragile? Some Empirical Tests

Grauwe, Paul De; Ji, Yuemei - CESifo - 2015

In this paper we provide empirical evidence documenting the nature of the Eurozone’s fragility. We find that during periods of turmoil, financial markets have tended to impose strong programs of austerity on member countries of the Eurozone. This confirms the evidence we found in a previous...

Persistent link: https://www.econbiz.de/10011122683

Animal Spirits and Credit Cycles

Grauwe, Paul De; Macchiarelli, Corrado - CESifo - 2013

In this paper we extend the behavioral macroeconomic model as proposed by De Grauwe (2012) to include a banking sector. The behavioral model takes the view that agents have limited cognitive limitations. As a result, it is rational to use simple forecasting rules and to subject the use of these...

Persistent link: https://www.econbiz.de/10010877798

The Interest Rate Pass-Through in the Euro Area During the Global Financial Crisis

Hristov, Nikolay; Hülsewig, Oliver; Wollmershäuser, Timo - CESifo - 2012

standard macroeconomic shocks. Our main empirical finding is that the pass–through from changes in the money market rate to …

Persistent link: https://www.econbiz.de/10010877927

The Changing Macroeconomic Response to Stock Market Volatility Shocks

Beetsma, Roel; Giuliodori, Massimo - CESifo - 2011

There is substantial consensus in the literature that positive uncertainty shocks predict a slowdown of economic activity. However, using U.S. data since 1950 we show that the macroeconomic response pattern to stock market volatility shocks has changed substantially over time. The negative...

Persistent link: https://www.econbiz.de/10009371360

Using Taylor Rules to Understand ECB Monetary Policy

Sauer, Stephan; Sturm, Jan-Egbert - CESifo - 2003

Over the last decade, the simple instrument policy rule developed by Taylor (1993) has become a popular tool for evaluating monetary policy of central banks. As an extensive empirical analysis of the ECB’s past behaviour still seems to be in its infancy, we estimate several instrument policy...

Persistent link: https://www.econbiz.de/10005765927

Optimal Stabilization Policy with Flexible Prices

Berentsen, Aleksander; Waller, Christopher - CESifo - 2005

fully flexible and money is essential for trade. Our main result is that if the central bank pursues a long-run price path …

Persistent link: https://www.econbiz.de/10005765956

Monetary Policy in a Channel System

Berentsen, Aleksander; Monnet, Cyril - CESifo - 2007

Channel systems for conducting monetary policy are becoming increasingly popular. Despite their popularity, the consequences of implementing policy with a channel system are not well understood. We develop a general equilibrium framework of a channel system and investigate the optimal policy. A...

Persistent link: https://www.econbiz.de/10005181445

Outside versus Inside Bonds: A Modigliani-Miller Type Result for Liquidity Constrained Economies

Berentsen, Aleksander; Waller, Christopher - CESifo - 2010

When agents are liquidity constrained, two options exist — sell assets or borrow. We compare the allocations arising in two economies: in one, agents can sell government (outside) bonds and in the other they can borrow by issuing (inside) bonds. All transactions are voluntary, implying no...

Persistent link: https://www.econbiz.de/10008799751

Hyperbolic Discounting and Positive Optimal Inflation

Graham, Liam; Snower, Dennis - CESifo - 2011

The Friedman rule states that steady-state welfare is maximized when there is deflation at the real rate of interest. Recent work by Khan et al (2003) uses a richer model but still finds deflation optimal. In an otherwise standard new Keynesian model we show that, if households have hyperbolic...

Persistent link: https://www.econbiz.de/10009024848

Money Creation and Destruction

Faure, Salomon A. - 2017

We study money creation and destruction in today's monetary architecture within a general equilibrium setting. Two … types of money are created and destructed: bank deposits, when banks grant loans to firms or to other banks, and central … bank money, when the central bank grants loans to private banks. We show that symmetric equilibria yield the first …

Persistent link: https://www.econbiz.de/10012950289