1,721,022 research outputs found
Comment on: “Monetary Policy and the Global Housing Bubble”
No full textThis paperfirst discusses potential problems with the
empirical methodology used by Dokko et al (2011) and point to an alternative empirical approach that could lead to a possibly different answer. Second it briefly reviews some of the literature on the connection between monetary policy and asset/housing prices and concludes with some considerations on the importance of this question in the current policy debate
Current Accounts in the Long and the Short Run: Comment
No full textThis comment explores the impact of productivity shocks on current account dynamics
Comment on: “From Great Depression to Great Credit Crisis: Similarities, Differences and Lessons”
No full textIn this note I will briefly comment on two points in Almunia et al. (2010)
The first regards the estimates of the size of the multiplier during
the great depression. The second qualifies the importance of fiscal policy in the current crisis
Comment on: “Optimal saving distortions with recursive preferences” by Emmanuel Fahri and Iván Werning
No full textThe paper discusses the efficiency of incomeplete markets economies with and without private information
The role of fiscal policy in Japan: a quantitative study
No full textThis paper analyzes the role of fiscal policy in the recent slowdown in Japan. A dynamic general equilibrium model is developed in which fiscal policy can have both expansionary effects (through increasing returns) and contractionary effects (through the increase of public debt and tax burden). A version of the model is calibrated to the Japanese economy and is used to measure the importance of both these effects. We find that, under a wide range of parameters, net expansionary effects are quantitatively small, thus suggesting a limited role for fiscal stabilizatio
Comment on: "Planning to cheat: EU scal policy in real time"
No full textThe purpose of this comment is analyze the relation between planned and actual scal stance and to explain why characterizing and measuring this relation has important implications for fiscal policy
Comment on: “Unsecured credit markets are not insurance markets” by Kartik Athreya, Xuan S. Tam and Eric R. Young
No full textThe comment provides, using household level data, some measures of the magnitude of the increase in income risk and of how much of it has actually resulted in increased consumption risk. The main finding is that household idiosyncratic risk has increased but consumption risk has increased much less. Since the paper suggests that the use of unsecured credit cannot be responsible for stable consumption risk, despite increasing income risk, I explore possible reasons that prevented the rise in consumption risk
The Great Moderation and the US External Imbalance
No full textThe early 1980s marked the onset of two striking features of the current
world macroeconomy: the fall in U.S. business cycle volatility (the “great
moderation”) and the large and persistent U.S. external imbalance. In this
paper, we argue that an external imbalance is a natural consequence of the
great moderation. If a country experiences a fall in volatility greater than
that of its partners, its incentives to accumulate precautionary savings fall
and this results in a permanent deterioration of its external balance.To assess how much of the current U.S. imbalance can be explained by this channel, we consider a standard two-country business cycle model in which households are subject to business cycle shocks they cannot perfectly insure against. The model suggests that a fall in business cycle volatility like that observed in the United States can account for about 20 percent of the actual U.S. external imbalance
Understanding Consumption Smoothing: Evidence from the U.S. Consumer Expenditure Data
No full textConsumption models with endogenous debt constraints differ from standard incomplete markets models in their predictions about an individual household's ability to smooth consumption across time and states of the world. In this paper we develop these differences, both theoretically and quantitatively. We then use data from the U.S. Consumer Expenditure Survey (CE) to assess along which dimensions the predictions of these models are consistent with the empirical evidence. We find that both types of models fail to fully account for the data and argue that a model that combines aspects of both might be more successful
Financial globalization and real regionalization
No full textOver the period 1972–1986, the US business cycle was strongly correlated with the business cycle in the rest of the industrialized world. Over the period 1986–2000, international co-movement was much weaker (real regionalization). At the same time, US international asset trade has increased significantly ( financial globalization). We first document these phenomena in detail and then argue that they are related. In particular, we present a model in which financial globalization occurs endogenously in response to less correlated real shocks. Financial globalization, by enhancing cross-border capital flows, further reduces the international correlations in GDP and factor supplies. We find that both less correlated shocks and the endogenous change in international financial markets are needed to quantitatively account for the observed changes in the international business cycle
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