Showing 1 - 10 of 52
This article presents new estimates of the Greek underground economy and explores the link between the underground economy and aggregate debt. We show that the Greek underground economy has been underestimated heavily and has been on a rising trend again since Greece adopted the Euro. We also...
Persistent link: https://www.econbiz.de/10010760711
Recently, convincing evidence has been presented that the recession in the wake of the recent financial crisis resulted primarily from an overly levered housing sector that was forced to deleverage and cut consumption spending when faced with collapsing housing prices. Following this...
Persistent link: https://www.econbiz.de/10010986696
In this paper we show that the degree of central bank independence influences the optimal choice of monetary policy strategy during potentially unsustainable asset price booms. We assume that central bankers have to choose between a policy that preemptively raises short-term real interest rates...
Persistent link: https://www.econbiz.de/10011056284
Persistent link: https://www.econbiz.de/10004990230
In this paper we explore the optimal policy reaction to an asset price boom. Empirical evidence shows that the monetary policy stance is typically loose during asset price booms. Emplying a modified New Keneysian sticky price model we show that this policy of leaning with the wind can be...
Persistent link: https://www.econbiz.de/10004998279
Recently, it has often been argued that globalization eases the job of central banks as it helps to tame inflation. This is used to argue that central banks (particularly the ECB, referring to the objectives as laid down in the EU-Treaty) could or should reduce their efforts in the fight against...
Persistent link: https://www.econbiz.de/10005106786
We analyze in this paper how the mutual dependence of private sector expectations in different countries on one another influences the stability of fixed exchange rate regimes. The crisis probabilities of countries trading with one another are interdependent because wage setters react to an...
Persistent link: https://www.econbiz.de/10005768924
Persistent link: https://www.econbiz.de/10005719097
A stochastic general-equilibrium model is used to explore the welfare effects of optimal monetary policy and the potential benefits of policy coordination. Cross-country perfectly symmetric shocks in the traded goods sectors and imperfectly correlated shocks in the non-traded goods sectors are...
Persistent link: https://www.econbiz.de/10005226355
In this paper, the optimal choice of a monetary target is investigated for a small open economy that is subject to foreign monetary policy shocks. In contrast to large parts of the literature, pegging the exchange rate is never the best policy choice for the small open economy in our model....
Persistent link: https://www.econbiz.de/10005234196