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A model of fickle capital flows and retrenchment : global liquidity creation and reach for safety and yield

Caballero, Ricardo J.; Simsek, Alp - 2016 - This draft: December 8, 2016

We develop a model of gross capital flows and analyze their role in global financial stability. In our model, consistent with the data, when a country experiences asset fire sales, foreign investments exit (fickleness) while domestic investments abroad return home (retrenchment). When countries...

Persistent link: https://www.econbiz.de/10011573237

Monetary Policy in a Downturn : Are Financial Crises Special?

Bech, Morten L. - 2014

Accommodative monetary policy during the financial crisis was instrumental in preventing a deeper recession. Views differ, however, on how long such measures should be kept in place. At the heart of this debate is the notion that a protracted period of policy accommodation could create...

Persistent link: https://www.econbiz.de/10013065335

Rational Bubbles in Non-Linear Business Cycle Models : Closed and Open Economies

Kollmann, Robert - 2020

This paper studies rational bubbles in non-linear dynamic general equilibrium models of the macroeconomy. The term ‘rational bubble' refers to multiple equilibria due to the absence of a transversality condition (TVC) for capital. The lack of TVC can be due to an OLG population structure. If a...

Persistent link: https://www.econbiz.de/10012835615

Global Recession to Global Recovery : Macro and Micro Dynamics of Trade, Finance and Investment

Chugan, Pawan K. - 2012

It is well known fact that all good things, as also bad things, come to an end and business cycles pass through good and bad economic times. Economically 2010 was a year of transition from economic recession to recovery. Economies were improving in some countries and industries were showing...

Persistent link: https://www.econbiz.de/10013110884

The Post-Crisis Slump in the Euro Area and the US : Evidence from an Estimated Three-Region DSGE Model

Kollmann, Robert - 2016

The global financial crisis (2008-09) led to a sharp contraction in both Euro Area (EA) and US real activity, and was followed by a long-lasting slump. However, the post-crisis adjustment in the EA and the US shows striking differences - in particular, the EA slump has been markedly more...

Persistent link: https://www.econbiz.de/10012998137

Rational Bubbles in Non-Linear Business Cycle Models : Closed and Open Economies

Kollmann, Robert - 2020

This paper studies rational bubbles in non-linear dynamic general equilibrium models of the macroeconomy. The term ‘Rational bubble' refers to multiple equilibria due to the absence of a transversality condition (TVC) for capital. The lack of TVC can be due to an OLG population structure. If a...

Persistent link: https://www.econbiz.de/10012842395

Hedging Sudden Stops & Precautionary Contractions

Caballero, Ricardo J.; Panageas, Stauros - 2005

Even well managed emerging market economies are exposed to significant external risk, the bulk of which is financial. At a moment's notice, these economies may be required to reverse the capital inflows that have supported the preceding boom. While capital flows crises are sudden nonlinear...

Persistent link: https://www.econbiz.de/10014081702

The Post-Crisis Slump in the Euro Area and the Us : Evidence from an Estimated Three-Region DSGE Model

Kollmann, Robert - 2017

The global financial crisis (2008-09) led to a sharp contraction in both Euro Area (EA) and US real activity, and was followed by a long-lasting slump. However, the post-crisis adjustment in the EA and the US shows striking differences—in particular, the EA slump has been markedly more...

Persistent link: https://www.econbiz.de/10012969881

Does the Us Current Account Show a Symmetric Behavior Over the Business Cycle?

Duncan, Roberto - 2017

Traditionally, the literature that attempts to explain the link between the current account and output finds a linear negative relationship (e.g., Backus et al., 1995). Using nonparametric regressions, we find a robust U-shaped relationship between the U.S. current account and the GDP cycle....

Persistent link: https://www.econbiz.de/10012970225

Monetary Policy Rules and Business Cycle in China : Bayesian DSGE Model Simulation

Sun, Lixin - 2011

-Wouters Model) with Taylor's rule and a modified Smets-Wouters model with a money growth rule, we have simulated China's monetary … policy transmission process and the roles of monetary variables and non monetary variables in China's business cycle by … model. The estimated values of the parameters in the model by Bayesian approach based on China's quarterly time series data …

Persistent link: https://www.econbiz.de/10013127342