This paper provides a baseline general equilibrium model of optimal monetary policy among
interdependent economies with monopolistic firms and nominal rigidities. An inward-looking …

We show that even when the exchange rate cannot be devalued, a small set of conventional
fiscal instruments can robustly replicate the real allocations attained under a nominal …

Does the fiscal multiplier depend on the exchange rate regime? To address this question,
we first estimate a panel vector autoregression (VAR) model on time-series data for OECD …

The objective of this paper is to analyze the effects of alternative monetary rules on real
exchange rate persistence. Using a two-country stochastic dynamic general equilibrium with …

Motivated by the asymmetric nature of liquidity and currency return, we set out a new
liquidity-adjusted extreme risk asset pricing model. Our model estimates asymmetric risk …

We study the convergence of European bond markets and the anchoring of inflation
expectations in the euro area from 1993 to 2008, using high-frequency bond yield data for …

This paper studies the role of monetary policy in a small open economy that experiences
Dutch disease effects as a result of capital inflows, and examines the issue of whether such …

We study the short-run macroeconomic effects of trade policies that are equivalent in a
friction-less economy, namely a uniform increase in import tariffs and export subsidies (IX) …

According to conventional wisdom, fiscal policy is more effective under a fixed than under a
flexible exchange rate regime. In this paper the authors reconsider the transmission of …

Fiscal devaluations—an increase in import tariffs and export subsidies (IX) or an increase in
value-added taxes and payroll subsidies (VP)—have been shown to provide as much …