This paper studies the impact of a securities transaction tax (STT) on financial trading, stock prices and real economic variables in closed-economy dynamic stochastic general-equilibrium model featuring financial frictions. The model incorporates channels by which 'noise trading' affects real...

In this paper, we study the relationship between income inequality and stock market returns. We develop a quantitative general equilibrium model that links shifts in both labour and capital income inequality to stock market variables. An increase of the share of capital owners' income from risky...

Oil prices have fallen by around 40% in euro terms since mid-2014, and are expected to remain relatively low in the medium term. With this situation in mind, this section assesses the effect of changes in oil prices on inflation and economic activity in the euro area. The analysis shows that the...