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Internal devaluation in currency unions: The role of trade costs and taxes

Petroulakis, Filippos - 2017

; trade costs explain the failure to substantially raise exports, and taxes the initial small fall in exports. … trade costs and taxes in internal devaluations, which have been brought to the fore of international policy during the … recent euro periphery crisis. Trade costs can limit the pass-through of internal devaluation on export prices. Using data on …

Persistent link: https://www.econbiz.de/10011667219

Fiscal multipliers and foreign holdings of public debt

Broner, Fernando; Clancy, Daragh; Erce, Aitor; Martin, … - 2019

This paper explores a natural connection between fiscal multipliers and foreign holdings of public debt. Although fiscal expansions can raise domestic economic activity through various channels, they can also have crowding-out effects if the resources used to acquire public debt reduce domestic...

Persistent link: https://www.econbiz.de/10012142099

Global value chain participation and exchange rate pass-through

Georgiadis, Georgios; Gräb, Johannes; Khalil, Makram - 2019

This paper draws a causal link between the rise of global value chain participation and the decline of exchange rate pass-through to import prices over the last decades. We first present a structural two-country model in order to illustrate how participation in global value chains can impact...

Persistent link: https://www.econbiz.de/10012142171

Sudden stops and asset purchase programmes in the euro area

Fabiani, Josefina; Fidora, Michael; Setzer, Ralph; … - 2021

This paper analyses the incidence and severity of sudden stops in euro area countries before and after the introduction of the ECB's asset purchase programmes. We define sudden stops as abrupt declines in private net financial inflows, i.e. total flows adjusted for EU and IMF loans and changes...

Persistent link: https://www.econbiz.de/10012661625

Real exchange rate in an inter-temporal n-country-model with incomplete markets

Mercereau, Benoît - 2003

We develop an N-country model with stock markets in which closed-form solutions for the real exchange rate is derived. Our model allows for a given number of risky-assets, which form an incomplete market. Risky asset prices and allocations of risky assets among countries are determined...

Persistent link: https://www.econbiz.de/10011604251

Growth expectations, capital flows and international risk sharing

Castrén, Olli; Miller, Marcus; Stiegert, Roger - 2003

Over the past decades, cross-border financial flows have increased in importance and have in many occasions exceeded the underlying current account positions. This phenomenon has been accompanied by an increase in the volume of international equity transactions that accentuate the role of...

Persistent link: https://www.econbiz.de/10011604283

International risk-sharing and the transmission of productivity shocks

Corsetti, Giancarlo; Dedola, Luca; Leduc, Sylvain - 2004

consumer prices and lower the impact of terms-of-trade changes on optimal agents’ decisions. Two very different patterns of the … strengthening, the other with a deterioration of the terms of trade and real exchange rate. Evidence on the effect of technology …, questioning the presumption that terms-of-trade movements foster international risk-pooling. …

Persistent link: https://www.econbiz.de/10011604354

Current accounts dynamics in OECD and EU acceding countries - an intertemporal approach

Bussière, Matthieu; Fratzscher, Marcel; Müller, Gernot J. - 2004

The paper extends the standard intertemporal model of the current account to include two important stylised facts: (1) the persistence of current account positions and (2) the relevance of the fiscal balance. Specifically, the paper derives a closed form solution for consumption in the presence...

Persistent link: https://www.econbiz.de/10011604357

Capital flows and the US ‘New Economy’: consumption smoothing and risk exposure

Miller, Marcus; Castrén, Olli; Zhang, Lei - 2005

In an analytically tractable model of the global economy, we calculate the Pareto improvement where a country experiencing a favourable supply side shock consumes more against expected future output and spreads the risk by selling shares. With capital inflows to finance the ‘New Economy’...

Persistent link: https://www.econbiz.de/10011604505

Productivity shocks, budget deficits and the current account

Bussière, Matthieu; Fratzscher, Marcel; Müller, Gernot J. - 2005

Currently the U.S. is experiencing record budget and current account deficits, a phenomenon familiar from the "Twin Deficits" discussion of the 1980s. In contrast, during the 1990s productivity growth has been identified as the primary cause of the US current account deficit. We suggest a...

Persistent link: https://www.econbiz.de/10011604555