Despite sustained high levels of commodity prices, the current account balances of several commodity-exporting countries have deteriorated in recent years. This phenomenon is examined quantitatively using a small open economy model with a commodity-producing sector and the assumption that agents...

This paper examines the macroeconomic effects of active fiscal policy management coupled with a monetary policy that follows the Taylor principle. The objective is to investigate the relevance of the Ricardian Equivalence Proposition (REP) in a framework where two large open economies interact...

This paper reviews extensively the literature on asset pricing and builds a structural dynamic general equilibrium model with financial assets. We obtain the policy function of the calibrated model and approximate it up to third order. We derive asset pricing and various premiums conditions up...

This paper examines non-Ricardian effects of government spending shocks in the Chilean economy. We first provide evidence on those effects based on vector autoregressions. We then show that such evidence can be accounted for by a model that features: (i) a sizeable share of non-Ricardian...

The increase in global economic volatility due to the ongoing crisis in developed countries and its spillovers to the rest of the world has brought renewed relevance to external shocks as a source of business cycles in emerging market economies. This paper analyzes changes in the impact of...

We set up and estimate a DSGE model of a small open economy to assess the role of domestic financial frictions in propagating foreign shocks. In particular, the model features two types of financial frictions: one in the relationship between depositors and banks (following Gertler and Karadi,...