Past empirical research on the effects of monetary policy in closed and open economies found evidence of several anomalies, such as the 'liquidity', 'price', 'exchange rate' and 'forward discount bias' puzzles. In this paper, we develop an approach that provides a solution to these empirical...

This paper examines the effects of taxation of human capital, physical capital and foreign assets in a multi-sector model of endogenous growth. It is shown that in general the growth rate is reduced by taxes on capital and labor (human capital) income. When the government faces no borrowing...

This paper contains an empirical investigation of the set of economic and political conditions that are associated with a likely occurrence of a sovereign debt crisis. We use a new statistical approach (Binary Recursive Tree) that allows us to derive a collection of ""rules of thumb"" that help...

This paper uses a global macroeconomic simulation model to identify the factors that have contributed to global trade and financial imbalances in the 1980s. After investigating the properties of monetary and fiscal policies in the model, we examine whether the budgetary shifts in the OECD...