We use a dynamic spatial general equilibrium model of international investment and production to investigate the real implications of the last five decades of financial globalization. We introduce a wedge accounting framework to estimate country- and time-varying measures of outward and inward...

This article introduces OPENSIMPLEST, a highly parsimonious stock-flow consistent (SFC) model of an open economy. The model is designed as a pedagogical and analytical benchmark that preserves the core mechanisms of more complex open-economy SFC frameworks while remaining complete, transparent,...

This paper extends the post-Keynesian model of the firm to an open-economy context to investigate the determinants of firms' target profit rates in developing and emerging economies (DEEs) and the ways in which these rates have been affected by the financialisation phenomenon. Our findings show...

We propose a macroprudential theory of foreign reserve accumulation that can rationalize the secular trends in public and private international capital flows. In middle-income countries, the increase in international reserves has been associated with elevated private capital inflows, both in the...

In this paper, we develop a small open economy model of secular stagnation that allows for both unemployment and underemployment. While unemployment results from the standard search and matching friction, underemployment in the form of an involuntary shortfall of working hours occurs under...

The first quarter of the twenty-first century has been transformative for emerging market and developing economies (EMDEs). These economies now account for about 45 percent of global GDP, up from about 25 percent in 2000, a trend driven by robust collective growth in the three largest EMDEs -...

Post-Keynesian conflict inflation models have received renewed attention in the course of the recent inflationary processes related to the recovery from the Covid-19 crisis in 2020 and the hike of energy prices in the context of the start of the Russian war on Ukraine in 2022. Although the basic...

This paper develops a stock-flow consistent (SFC) macroeconomic model with an energy sector for China to investigate the effect of green policies on green transition and the economy. We provide an analytical solution for green transition that illustrates the relative cost of using conventional...

The objective of this paper is to analyse profitability and risk through the return on equity (ROE) measure of the open economy insurance sector in a non-stable economic period with an economic shock chain, during the years 2018-2022, characterised by an overheating economy, the Covid pandemic,...

Housing prices have recently risen sharply in many countries, primarily linked to the global credit cycle. Although various factors play a role, the ability of developing countries to navigate this cycle and maintain autonomous monetary policies is crucial. This paper introduces a dynamic...

This paper develops a nonlinear optimization model for the optimal allocation of labor and investment resources in a three-sector open economy. The model is based on the Cobb-Douglas production function and incorporates sectoral interdependencies, capital depreciation, trade balances, and import...

We use a dynamic spatial general equilibrium model of international investment and production to in vestigate the real implications of the last five decades of financial globalization. We introduce a wedge accounting framework to estimate country- and time-varying measures of outward and inward...

The new US administration has a clear agenda of reducing imports to the US and attract FDI by reducing tariffs and using the proceeds for supporting investment in the US. This paper uses a dynamic two country US vs RoW model where monopolistically competitive firms make export and FDI decisions....

This paper studies the design of monetary policy in small open economies with domestic and cross-border production networks and nominal rigidities. The monetary policy that closes the domestic output gap is nearly optimal and is implemented by stabilizing the aggregate inflation index that...

This paper analyzes the monetary policy trade-off between defending purchasing power of consumers and keeping moderate debt cost for borrowers, in the framework of a heterogeneous agent New Keynesian open economy hit by a foreign energy price shock. Raising the interest rate indeed combats the...

In this paper, we analyze the impact of external uncertainty shocks on the Korean economy, focusing on Russian geopolitical risks and U.S. monetary policy uncertainty. We find that increases in external uncertainties negatively affect the Korean macroeconomy, with a particularly pronounced...

This paper studies the design of monetary policy in small open economies with domestic and cross-border production networks and nominal rigidities. The monetary policy that closes the domestic output gap is nearly optimal and is implemented by stabilizing the aggregate inflation index that...

We compare the macroeconomic and housing-market effects of (1) reducing mortgage subsidies, (2) tightening borrower-based tools (debt-service-to-income [DSTI]/loan-to-value [LTV]) and (3) standard monetary and external shocks.We develop a small open-economy (SOE) New Keynesian dynamic stochastic...