Showing 1 - 7 of 7
In this paper selective issues of long-run sustainability of monetary unions are analyzed. Using theoretical insights and the experience of EMU up to now we argue that empirical evidence on OCA criteria for EMU suggests that benefits for the countries participating in EMU outweigh costs by a...
Persistent link: https://www.econbiz.de/10013369985
The paper proposes an approach to evaluate hypotheses about transition dynamics when only the distributions at two points in time are observed. Using the principle of statistical mechanics, we show how to adjust in the most probable way a hypothesis so that it becomes compatible with the...
Persistent link: https://www.econbiz.de/10010291915
The Multiplicative Ergodic Theorem provides a novel general methodology to analyze rational expectations models with stochastically varying coefficients. The approach is applied for the first time to economics and analyzes the canonical New Keynesian model with a Taylor rule which switches...
Persistent link: https://www.econbiz.de/10012112064
While rational expectations models with time-varying (random) coefficients have gained some esteem, the understanding of their dynamic properties is still in its infancy. The paper adapts results from the theory of random dynamical systems to solve and analyze the stability of rational...
Persistent link: https://www.econbiz.de/10012112101
The notion of the group of orthogonal matrices acting on the set of all feasible identification schemes is used to characterize the identification problem arising in structural vector autoregressions. This approach presents several conceptual advantages. First, it provides a fundamental...
Persistent link: https://www.econbiz.de/10011583290
Based on a relative entropy approach, this paper proposes a method to estimate or update transition matrices using just cross-sectional observations at two points in time. The method is then applied to explain the development of the US income distribution. Starting from three hypothesized...
Persistent link: https://www.econbiz.de/10011933168
The output gap plays an important role in the assessment and conduct of monetary policy. Most of the current literature, however, relies on filtering procedures which use ad hoc smoothness arguments for identification. Furthermore, they are subject to end-of-sample problems and do not provide...
Persistent link: https://www.econbiz.de/10011933224