This paper focuses on the impact of full capital account liberalization on macroeconomic volatility in Greece. According to the standard neoclassical model, such liberalization is to be desired because, among other advantages, it may reduce macroeconomic volatility. The link between...

This paper uses a dynamic general equilibrium two-country optimizing ‘new-open economy macroeconomics’ model to analyze the consequences of international capital mobility for the effectiveness of fiscal policy. Conventional wisdom suggests that higher capital mobility diminishes the...

This paper uses a dynamic general equilibrium two-country optimizing model to analyze the consequences of international capital mobility for the effectiveness of monetary policy in open economies. The model shows that the substitutability of goods produced in different countries plays a central...

We recognize that intertemporal models of the current account (Frankel and Razin with Yuen 1996, or Baxter and Crucini 1993) imply a theory of consumption smoothing channels, and thus we build an empirical model on the theoretical foundations of Sachs (1982)¡¯s optimizing model in order to...

We recognize that intertemporal models of the current account (Frankel and Razin with Yuan 1996, or Baxter and Crucini 1993) imply a theory of consumption smoothing channels, and thus we build an empirical model on the theoretical foundations of Sachs (1982)'s optimizing model in order to...

The prime task of modelling cross-market contagion is to predict the imminence of a pestilent currency crisis. Empirical models are developed here to study the roles and channels of contagion in exchange rate volatilities, in ways which are as economically sound and econometrically simple as...

This paper analyzes capital mobility within Japan based on the consumption-based correlation method developed by Obstfeld (1994). This thoery suggests that consumption in one region is closely related to that in other regions if the capital market is open. We test this theoretical implication in...

This paper tests the central predictions of the theoretical tax competition literature for capital tax rates for a panel of European Union countries, notably a race to the bottom in corporate tax burdens. In contrast to the previous empirical literature, empirical support for increasing capital...