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Income inequality, financial crises, and monetary policy

Cairó, Isabel; Sim, Jae W. - 2018

pressure, and excessive credit growth by allocating income to agents featuring low marginal propensity to consume, and if …

Persistent link: https://www.econbiz.de/10011932429

The Response of Capital Goods Shipments to Demand Over the Business Cycle

Nalewaik, Jeremy - 2012

This paper studies the behavior of producers of capital goods, examining how they set shipments in response to fluctuations in new orders. The paper establishes a stylized fact: the response of shipments to orders is more pronounced when the level of new orders is low relative to the level of...

Persistent link: https://www.econbiz.de/10013106762

International Policy Spillovers at the Zero Lower Bound

Haberis, Alex - 2012

In this paper, we consider how monetary policy in a large, foreign economy affects optimal monetary policy in a small open economy ('home') in response to a large global demand shock that pushes both economies to the zero lower bound (ZLB) on nominal interest rates. We show that the inability of...

Persistent link: https://www.econbiz.de/10013106784

Credit Default Swaps in General Equilibrium : Spillovers, Credit Spreads, and Endogenous Default

Darst, Matthew - 2016

This paper highlights two new effects of credit default swap markets (CDS) in a general equilibrium setting. First …, when firms' cash flows are correlated, CDSs impact the cost of capital{credit spreads{and investment for all firms, even … those that are not CDS reference entities. Second, when firms internalize the credit spread changes, the incentive to issue …

Persistent link: https://www.econbiz.de/10012992726

Information in yield spread trades

Park, Yang-Ho - 2019

Using positions data on bond futures, I document that speculators' spread trades contain private information about future economic activities and asset prices. Strong steepening trades are associated with negative payroll surprises in subsequent months and can predict asset markets' reaction to...

Persistent link: https://www.econbiz.de/10012018461

Estimating the Long-Run User Cost Elasticity for a Small Open Economy : Evidence Using Data from South Africa

Millar, Jonathan; Coulibaly, Brahima - 2007

This paper estimates the long run elasticity of the demand for fixed nonresidential capital (both equipment and structures) to changes in its user cost using a quarterly panel of two-digit manufacturing data from South Africa from 1970 to 2001. Using a difference specification that does not rely...

Persistent link: https://www.econbiz.de/10014225410

Commodity prices and labour market dynamics in small open economies

Bodenstein, Martin; Kamber, Gunes; Thoenissen, Christoph - 2017

We investigate the connection between commodity price shocks and unemployment in advanced resource-rich small open economies from an empirical and theoretical perspective. Shocks to commodity prices are shown to influence labour market conditions primarily through the real exchange rate. The...

Persistent link: https://www.econbiz.de/10011709241

Effective lower bound risk

Hills, Timothy S.; Nakata, Taisuke; Schmidt, Sebastian - 2019 - This draft: September 2019

Even when the policy rate is currently not constrained by its effective lower bound (ELB), the possibility that the policy rate will become constrained in the future lowers today's inflation by creating tail risk in future inflation and thus reducing expected inflation. In an empirically rich...

Persistent link: https://www.econbiz.de/10012182403

The Risky Steady State and the Interest Rate Lower Bound

Hills, Timothy - 2016

Persistent link: https://www.econbiz.de/10013210370

The Real Effects of Credit Line Drawdowns

Berrospide, Jose M. - 2015

Do firms use credit line drawdowns to finance investment? Using a unique dataset of 467 COMPUSTAT firms with credit … lines, we study the purpose of drawdowns during the 2007-2009 financial crisis. Our data show that credit line drawdowns had …. Using an instrumental variable approach based on institutional features of credit line contracts, we find that a one …

Persistent link: https://www.econbiz.de/10013027918