This paper studies how introducing habit formation to the two-sector small open economy model of Obstfeld and Rogoff (1995) and Lane (1997) affects the impact of a monetary surprise on welfare. In this model with endogenous habit formation, we examine agents' responses to a monetary expansion...

Monetary policy design in currency unions faces more challenging scenarios like the presence of asymmetric shocks and the higher probability of time inconsistency. An evaluation of the union welfare under a monetary rule and under discretion in these circumstances is carried out. Assuming that...

This paper proposes a theoretical growth model where seigniorage can be used to finance productive public spending, and show the existence of nonlinear effects between seigniorage and economic growth. Empirical evidence based on panel regression techniques provides some support for these...

This paper analyses the impact of monetary and fiscal policies' interaction on the financial stability of the eurozone. Based on the construction of a financial stability index for the entire euro area, we assess the impact in terms of the stability of different configurations of policy-mix...

This paper proposes a theoretical growth model where seigniorage can be used to finance productive public spending, and show the existence of nonlinear effects between seigniorage and economic growth. Empirical evidence based on panel regression techniques provides some support for these...

This article develops an OLG model with random relocations of agents among more-than-two islands, wherein asymmetric liquidity shocks are observed. The model exhibits suboptimality of the Friedman rule. Furthermore, it is shown that there is no room for monetary policy to improve social welfare...

The subsidiarity principle governing the collection of statistical data in the EMU may cause asymmetrical information. The national governments may be tempted to distort their economic and financial data communicated to ECB in order to influence its monetary policy decisions. We base our...

This paper proposes a theoretical growth model where seigniorage can be used to finance productive public spending, and show the existence of nonlinear effects between seigniorage and economic growth. Empirical evidence based on panel regression techniques provides some support for these...

This paper studies the effects the fiscal coordination can have in terms of macroeconomic stabilization in a monetary Union which is heterogeneous at the level of the mechanisms of monetary policy transmission. We will use a static Keynesian model in a closed monetary Union and will prove that...