nep-mac New Economics Papers
on Macroeconomics
Issue of 2011‒07‒27
28 papers chosen by
Soumitra K Mallick
Indian Institute of Social Welfare and Business Management

  1. Fiscal News and Macroeconomic Volatility By Benjamin Born; Alexandra Peter; Johannes Pfeifer
  2. A Gains from Trade Perspective on Macroeconomic Fluctuations By Beaudry, Paul; Portier, Franck
  3. Informality, Frictions and Monetary Policy By Nicoletta Batini; Paul Levine; Emanuela Lotti; Bo Yang
  4. The theoretical framework of monetary policy revisited By Balfoussia, Hiona; Brissimis, Sophocles; Delis, Manthos D
  5. Fiscal and Monetary Institutions in Central, Eastern and South-Eastern European Countries By Zsolt Darvas; Valentina Kostyleva
  6. How do inflation expectations form? New insights from a high-frequency survey By Gabriele Galati; Peter Heemeijer; Richhild Moessner
  7. The Euro-Sting revisited: PMI versus ESI to obtain euro area GDP forecasts By Maximo Camacho; Agustin Garcia-Serrador
  8. Monetary policy under myopia By Gaël Giraud; Nguenamadji Orntangar
  9. Real Business Cycles with a Human Capital Investment Sector and Endogenous Growth: Persistence, Volatility and Labor Puzzles By Jing Dang; Max Gillman; Michal Kejak
  10. Macroeconomic Policy for Growth and Poverty Reduction: An Application to Post-Conflict and Resource-Rich Countries By Degol Hailu; John Weeks
  11. How to Solve the Price Puzzle? A Meta-Analysis By Marek Rusnák; Tomáš Havránek; Roman Horváth
  12. International Recessions By Perri, Fabrizio; Quadrini, Vincenzo
  13. Identification of Monetary Policy in SVAR Models: A Data-Oriented Perspective By Matteo Fragetta; Giovanni Melina
  14. Accounting for the Decline in the Velocity of Money in the Japanese Economy By Nao Sudo
  15. "The Global Crisis and the Remedial Actions: A Nonmainstream Perspective" By Sunanda Sen
  16. Financial Development and Economic Growth in Latin America: Is Schumpeter Right? By Bittencourt, Manoel
  17. House Price Booms and the Current Account By Klaus Adam; Pei Kuang; Albert Marcet
  18. Constructing New Macroeconomic Models (Japanese) By KOBAYASHI Keiichiro
  19. Bank Overleverage and Macroeconomic Fragility By Ryo Kato; Takayuki Tsuruga
  20. Unemployment out of nowhere – a structural axiomatic analysis of objective determinants By Kakarot-Handtke, Egmont
  21. The Era of the U.S.-Europe Labor Market Divide: What can we learn? By Philip, Jung; Moritz, Kuhn
  22. Sources of Entropy in Representative Agent Models By David Backus; Mikhail Chernov; Stanley E. Zin
  23. Impact de la crise sur la croissance potentielle. Une approche par les modèles à composantes inobservables. By Chetouane, Mabrouk; Lemoine, Matthieu; De la Serve, Marie-Elisabeth
  24. The Impact of the Global Financial Crisis on Education and Healthcare in the Economies of the Former Soviet Union – the Case of Moldova By Nina Cainarean; Eugenia Veverita; Petru Veverita
  25. Die Deutsche Wiedervereinigung und die europäische Schuldenkrise im Lichte der Theorie optimaler Währungsräume By Schnabl, Gunther; Zemanek, Holger
  26. FDI and the labor share in developing countries: A theory and some evidence By Maarek, Paul; Decreuse, Bruno
  27. Sources of entropy in representative agent models By Backus, David; Chernov, Mikhail; Zin, Stanley E.
  28. Technology and the Changing Family By Jeremy Greenwood; Nezih Guner; Georgi Kocharkov; Cezar Santos

  1. By: Benjamin Born; Alexandra Peter; Johannes Pfeifer
    Abstract: This paper analyzes the contribution of anticipated capital and labor tax shocks to business cycle volatility in an estimated New Keynesian DSGE model. While fiscal policy accounts for 12 to 20 percent of output variance at business cycle frequencies, the anticipated component hardly matters for explaining fluctuations of real variables. Anticipated capital tax shocks do explain a sizable part of inflation and interest rate fluctuations, accounting for between 5 and 15 percent of total variance. In line with earlier studies, news shocks in total account for 20 percent of output variance. Further decomposing this news effect, we find that it is mostly driven by stationary TFP and non-stationary investment-specific technology.
    Keywords: Anticipated Tax Shocks; Sources of Aggregate Fluctuations; Bayesian Estimation
    JEL: E32 E62 C11
    Date: 2011–07
  2. By: Beaudry, Paul; Portier, Franck
    Abstract: Business cycles reflect changes over time in the amount of trade between individuals. In this paper we show that incorporating explicitly intra-temporal gains from trade between individuals into a macroeconomic model can provide new insight into the potential mechanisms driving economic fluctuations as well as modify key policy implications. We first show how a "gains from trade" approach can easily explain why changes in perceptions about the future (including \news" about the future) can cause booms and bust. We then turn to fiscal policy, and discuss under what conditions fiscal multipliers can be observed. While much of our analysis is conducted in a fl exible price environment, we also present implications of our model for a sticky price environments, as it allows to understand stable-in ation boom-bust cycles. The source of the explicit gains from trade in our setup derives from simply assuming that in the short run workers are not perfect mobile across all sectors of the economy. We provide evidence from the PSID in support of this modeling assumption.
    Keywords: Business Cycle; Fiscal Policy; Heterogeneous Agents; Investment; Monetary Policy
    JEL: E32
    Date: 2011–07
  3. By: Nicoletta Batini (University of Surrey and IMF); Paul Levine (University of Surrey); Emanuela Lotti (University of Southampton and University of Surrey); Bo Yang (University of Surrey)
    Abstract: How does informality in emerging economies affect the conduct of monetary policy? To answer this question we construct a two-sector, formal-informal new Keynesian closed-economy. The informal sector is more labour intensive, is untaxed, has a classical labour market, faces high credit constraints in financing investment and is less visible in terms of observed output. We compare outcomes under welfare-optimal monetary policy, discretion and welfare-optimized interest-rate Taylor rules building the model in stages; first with no frictions in these two markets, then with frictions in only the formal labour market and finally with frictions on both credit markets and the formal labour market. Our main conclusions are first, labour and financial market frictions, the latter assumed to be stronger in the informal sector, cause the time-inconsistency problem to worsen. The importance of commitment therefore in- creases in economies characterized by a large informal sector with the features we have highlighted. Simple implementable optimized rules that respond only to observed aggregate inflation and formal-sector output can be significantly worse in welfare terms than their optimal counterpart, but are still far better than discretion. Simple rules that respond, if possible, to the risk premium in the formal sector result in a significant welfare improvement.
    Keywords: Informal economy, emerging economies, labour market, credit market, tax policy, interest rate rules
    JEL: J65 E24 E26 E32
    Date: 2011–07
  4. By: Balfoussia, Hiona; Brissimis, Sophocles; Delis, Manthos D
    Abstract: The three-equation New-Keynesian model advocated by Woodford (2003) as a self-contained system on which to base monetary policy analysis is shown to be inconsistent in the sense that its long-run static equilibrium solution implies that the interest rate is determined from two of the system’s equations, while the price level is left undetermined. The inconsistency is remedied by replacing the Taylor rule with a standard money demand equation. The modified system is seen to possess the key properties of monetarist theory for the long run, i.e. monetary neutrality with respect to real output and the real interest rate and proportionality between money and prices. Both the modified and the original New-Keynesian models are estimated on US data and their dynamic properties are examined by impulse response analysis. Our research suggests that the economic and monetary analysis of the European Central Bank could be unified into a single framework.
    Keywords: Monetary theory; Central banking; New-Keynesian model; Impulse response analysis
    JEL: E58 E52 E40 E47
    Date: 2011–07–13
  5. By: Zsolt Darvas (Bruegel, Institute of Economics - Hungarian Academy of Sciences); Valentina Kostyleva (OECD Public Governance and Territorial Development Directorate)
    Abstract: This paper studies the role of fiscal and monetary institutions in macroeconomic stability and budgetary control in central, eastern and south-eastern European countries (CESEE) in comparison with other OECD countries. CESEE countries tend to grow faster and have more volatile output than non-CESEE OECD countries, which has implications for macroeconomic management: better fiscal and monetary institutions are needed to avoid pro-cyclical policies. The paper develops a Budgetary Discipline Index to assess whether good fiscal institutions underpin good fiscal outcomes. Even though most CESEE countries have low scores, the debt/GDP ratios declined before the crisis. This was largely the consequence of a very favourable relationship between the economic growth rate and the interest rate, but such a favourable relationship is not expected in the future. Econometric estimations confirm that better monetary institutions reduce macroeconomic volatility and that countries with better budgetary procedures have better fiscal outcomes. All these factors call for improved monetary institutions, stronger fiscal rules and better budgetary procedures in CESEE countries.
    Keywords: CESEE countries; Budgetary Discipline Index; budget process; fiscal institutions; budgetary institutions; monetary institutions; macroeconomic stability; econometric analysis; budgetary procedures; fiscal outcomes; fiscal rules.
    JEL: E32 E50 H11 H60
    Date: 2011–06
  6. By: Gabriele Galati; Peter Heemeijer; Richhild Moessner
    Abstract: We provide new insights on the formation of inflation expectations - in particular at a time of great financial and economic turmoil - by evaluating results from a survey conducted from July 2009 through July 2010. Participants in this survey answered a weekly questionnaire about their short-, medium- and long-term inflation expectations. Participants received common information sets with data relevant to euro area inflation. Our analysis of survey responses reveals several interesting results. First, our evidence is consistent with long-term expectations having remained well anchored to the ECB's definition of price stability, which acted as a focal point for long-term expectations. Second, the turmoil in euro area bond markets triggered by the Greek fiscal crisis influenced short- and medium-term inflation expectations but had only a very small impact on long-term expectations. By contrast, longterm expectations did not react to developments of the euro area wide fiscal burden. Third, participants changed their expectations fairly frequently. The longer the horizon, the less frequent but larger these changes were. Fourth, expectations exhibit a large degree of timevariant non-normality. Fifth, inflation expectations appear fairly homogenous across groups of agents at the shorter horizon but less so at the medium- and long-term horizons.
    Keywords: inflation expectations, monetary policy, crisis
    Date: 2011–07
  7. By: Maximo Camacho; Agustin Garcia-Serrador
    Abstract: This paper uses an extension of the Euro-Sting single-index dynamic factor model to construct short-term forecasts of quarterly GDP growth for the euro area, as also including financial variables as leading indicators. From a simulated real-time exercise, the model is used to investigate the forecasting accuracy across the different phases of the business cycle. In addition, the model is used to evaluate the relative forecasting ability of the two most watched business cycle surveys for the eurozone, the PMI and the ESI. We show that the latter produces more accurate GDP forecasts than the former. Finally, the proposed model is also characterized by its great ability to capture the European business cycle, as well as the probabilities of expansion and/or contraction periods.
    Keywords: Real-time forecasting, dynamic factor model, eurozone GDP, business cycle
    JEL: E32 C22 E27
    Date: 2011–06
  8. By: Gaël Giraud (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, ESCP-Europe - Campus de Paris); Nguenamadji Orntangar (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: This paper provides a new framework for monetary macro-policy, where the Central Bank potentially intervenes both on short-term and long-term loans markets, and can do this alternatively by manipulating interest rates or money supply. Following Bonnisseau and Orntangar (2010) and Giraud and Tsomokos (2010), we develop a discrete-time out-of-equilibrium dynamics with real trades, performed by myopic heterogeneous households in a cash-in-advance economy with several goods. Positive value and non-neutrality of fiat money are shown to be compatible with a local quantity theory of money. Every monetary policy induces a globally unique trade path, both for real and nominal variables.Thus, monetary policy and myopia suffice to pin down the absolute level of prices. However, a minimal money growth rate is exhibited, which depends upon the level of households' long-term debt and current gains-to-trade. Below this growth rate, the economy falls into a local liquidity trap ; above it, the economy eventually converges towards a Pareto-optimal rest-point while inflation raises in an unbounded fashion. As a consequence, a literal application of Taylor's rule leads the economy to a local liquidity trap. These findings provide insight into recent non-conventional monetary policies led by Central Banks.
    Keywords: Central Bank, gains to trade, Taylor rule, myopia, liquidity trap.
    Date: 2011–02
  9. By: Jing Dang (State Grid Corporation of China (SGCC)); Max Gillman (Institute of Economics - Hungarian Academy of Sciences); Michal Kejak (The Center for Economic Research and Graduate Education of Charles University (CERGE EI))
    Abstract: An identical two-sector productivity shock causes Rybczynski (1955) and Stolper and Samuelson (1941) effects that release leisure time and initially raise the relative price of human capital investment so as to favor it over goods production. Modified by having the household sector produce human capital investment sector, the RBC model follows the international approach of Maffezzoli (2000) and so adds a second sector relative to Jones et al. (2005). This captures key major US RBC data: output growth persistence, with hump-shaped impulse responses; hump-shaped physical capital investment impulse responses; Gali's (1999) negative impulse response of labour supply; and hours volatility.
    Keywords: real business cycle, human capital, endogenous growth
    JEL: E24 E32 O41
    Date: 2011–06
  10. By: Degol Hailu; John Weeks
    Abstract: A fundamental shift in macroeconomic policy thinking is taking place. This shift opens a space for implementing policies that promote growth and reduce poverty in developing countries. In this paper, policies for post-conflict and resource-rich economies are outlined. Fiscal policy would focus on revenue mobilization, scaling-up public investment, and preventing over-heating. Monetary policies would revive the financial sector, prevent inflationary pressures and stimulate private sector investment. Exchange rate policies should focus on achieving slow depreciation and maintaining international competitiveness. These policies should not be considered in isolation from each other, but in coordination.
    Keywords: Macroeconomics, fiscal policy, monetary policy, exchange rate policy, conflict, natural resources, economic development, heterodox economics
    JEL: E6 E5 H3 O23 B50 D74 Q32
    Date: 2011–07
  11. By: Marek Rusnák (CERGE-EI); Tomáš Havránek (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic); Roman Horváth (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic)
    Abstract: The short-run increase in prices following an unexpected tightening of monetary policy represents a frequently reported puzzle. Yet the puzzle is easy to explain away when all published models are quantitatively reviewed. We collect and examine about 1,000 point estimates of impulse responses from 70 articles using vector autoregressive models to study monetary transmission in various countries. We find some evidence of publication selection against the price puzzle in the literature, but our results also suggest that the reported puzzle is mostly caused by model misspecifications. Finally, the long-run response of prices to monetary policy shocks depends on the characteristics of the economy.
    Keywords: Monetary policy transmission; Price puzzle; Meta-analysis; Publication selection bias
    JEL: E52
    Date: 2011–07
  12. By: Perri, Fabrizio; Quadrini, Vincenzo
    Abstract: The 2008-2009 crisis was characterized by an unprecedented degree of international synchronization as all major industrialized countries experienced large macroeconomic contractions around the date of Lehman bankruptcy. At the same time countries also experienced large and synchronized tightening of credit conditions. We present a two-country model with financial market frictions where a credit tightening can emerge as a self-fulfilling equilibrium caused by pessimistic but fully rational expectations. As a result of the credit tightening, countries experience large and endogenously synchronized declines in asset prices and economic activity (international recessions). The model suggests that these recessions are more severe if they happen after a prolonged period of credit expansion.
    Keywords: credit tightness; international crisis
    JEL: E32 F3
    Date: 2011–07
  13. By: Matteo Fragetta (University of Salerno); Giovanni Melina (University of Surrey)
    Abstract: This paper applies graphical modelling theory to recover identifying restrictions for the analysis of monetary policy shocks in a VAR of the US economy. Results are in line with the view that only high-frequency data should be assumed to be in the information set of the monetary authority when the interest rate decision is taken.
    Keywords: Monetary policy; SVAR; Graphical modelling
    JEL: E43 E52
    Date: 2011–07
  14. By: Nao Sudo (Deputy Director, Institute for Monetary and Economic Studies (currently Research and Statistics Department), Bank of Japan (E-mail:
    Abstract: A notable feature of the Japanese economy following the banking crisis of the late 1990s is the drastic decline in the velocity of money and the consequent decline in the price level. Based on the inventory model of money demand a la Alvarez, Atkeson, and Edmond (2009), we explore how macroeconomic shocks affect the velocity. Households in the model are subject to a multiple-period cash-in-advance constraint in which the portion of the payment in cash, which we call the liquidity requirement, varies according to the credit service supply in the economy. Extracting various shocks underlying the velocity variations from 1990 to 2010, we find that an increase in the liquidity requirement is the key driver of the decline in velocity. Particularly important is the channel stemming from householdsf expectations about the future liquidity requirement. During the Japanese banking crisis and the global financial crisis, credit service is disrupted and households expect the disruption to last long. Since they demand additional money for a higher liquidity requirement for current and future transactions, the velocity and the price level decrease, even though the growth rate of money stock then exceeds that of consumption.
    Keywords: Velocity of Money, Liquidity Requirement, Financial Crises
    JEL: E4 E5
    Date: 2011–07
  15. By: Sunanda Sen
    Abstract: The global financial crisis has now spread across multiple countries and sectors, affecting both financial and real spheres in the advanced as well as the developing economies. This has been caused by policies based on "rational expectation" models that advocate deregulated finance, with facilities for easy credit and derivatives, along with globalized exposures for financial institutions. The financial crisis has combined with long-term structural changes in the real economy that trend toward underconsumption, generating contractionary effects therein and contributing to further instabilities in the financial sector. The responses so far from US monetary authorities have not been effective, especially in dealing with issues of unemployment and low real growth in the United States, or in other countries. Nor have these been of much use in the context of the lost monetary and fiscal autonomy in both developing countries and the eurozone, especially with the debt-related distress in the latter. Solutions to the current maladies in the global economy include strict control of financial speculation and the institution of an "employer of last resort" policy, both at the initiative of the state.
    Keywords: Global Crisis; Expectations; Underconsumption; Ponzi; Labor Flexibility
    JEL: E2 E4 E5 E6 J2 J3 J6
    Date: 2011–07
  16. By: Bittencourt, Manoel
    Abstract: In this paper we investigate the role of financial development, or more widespread access to all sorts of finance, in generating economic growth in four Latin American countries between 1980 and 2007. The results, based on panel time-series data and analysis, confirm the Schumpeterian prediction which suggests that finance authorises the entrepreneur to invest in productive activities, and therefore to promote economic growth. Furthermore, given the characteristics of the sample of countries chosen, we highlight not only the importance of a more open, competitive and therefore active financial sector in channelling financial resources to entrepreneurs, but also the relevance of macroeconomic stability (in terms of low inflation rates), and all the institutional framework that it encompasses (central bank independence and fiscal responsibility laws), as a necessary pre-condition for financial development, and consequently for sustained growth and prosperity in the region. --
    Keywords: Finance,growth,Latin America
    JEL: E31 N16 O11 O54
    Date: 2011
  17. By: Klaus Adam; Pei Kuang; Albert Marcet
    Abstract: A simple open economy asset pricing model can account for the house price and current account dynamics in the G7 over the years 2001-2008. The model features rational households, but assumes that households entertain subjective beliefs about price behavior and update these using Bayes' rule. The resulting beliefs dynamics considerably propagate economic shocks and crucially contribute to replicating the empirical evidence. Belief dynamics can temporarily delink house prices from fundamentals, so that low interest rates can fuel a house price boom. House price booms, however, are not necessarily synchronized across countries and the model is consistent with the heterogeneous response of house prices across the G7 following the reduction in real interest rates at the beginning of the millennium. The response to interest rates depends sensitively on agents' beliefs at the time of the interest rate reduction, which in turn are a function of the country specific history prior to the year 2000. According to the model, the US house price boom could have been largely avoided, if real interest rates had decreased by less after the year 2000.
    JEL: E44 F32 F41
    Date: 2011–07
  18. By: KOBAYASHI Keiichiro
    Abstract: This publication is in Japanese. Neither an English translation of the publication nor an English abstract is available.
    Date: 2011–01
  19. By: Ryo Kato (Director and Senior Economist, Institute for Monetary and Economic Studies, Bank of Japan (E-mail:; Takayuki Tsuruga (Associate Professor, Graduate School of Economics, Kyoto University, (E-mail:
    Abstract: This paper develops a dynamic general equilibrium model that explicitly includes a banking sector with a maturity mismatch. We demonstrate that, despite the perfect competition in the banking sector, rational banks take on excessive risks systemically, resulting in overleverage and inefficiently high crisis probabilities. The model accounts for the banks' rational over-optimism regarding future capital prices which arises from pecuniary externalities on their own solvency. Using the model as an example, we introduce MSR (marginal systemic risk) as a general measure to assess the macroeconomic exposure to systemic risks.
    Keywords: Financial crisis, Liquidity shortage, Maturity mismatch, Pecuniary externalities
    JEL: E3 G21
    Date: 2011–07
  20. By: Kakarot-Handtke, Egmont
    Abstract: Unemployment is usually explained with reference to the equilibrium of supply and demand in the labour market. This approach rests on specific behavioral assumptions that are formally expressed as axioms. The standard set of axioms is replaced in the present paper by a set of structural axioms. This approach yields the objective determinants of employment. They consist of effective demand, the actual outcome of price formation, structural stress as determined by the heterogeneity within the business sector and the income distribution. Sudden changes of employment are effected by latent relative switchers that are hard to spot empirically.
    Keywords: New framework of concepts; Structure-centric; Axiom set; Full employment; Employment–profit ratio trade-off; Causality; Economic law; Historical specificity; Latent relative switcher
    JEL: E24 E21
    Date: 2011–07–14
  21. By: Philip, Jung; Moritz, Kuhn
    Abstract: Comparing labor markets in the United States and Germany as Europe’s largest economy over the period from 1980−2004 uncovers three stylized differences: (1) Germany’s mean transition rates from unemployment to employment (UE) were lower by a factor of 5 and transition rates from employment to unemployment (EU) were lower by a factor of 4. (2) The volatility of the UE rate was equal in both countries, but the EU rate was 2.3 times more volatile in Germany. (3) In Germany EU flows contributed 60−70% to unemployment volatility, whereas in the U.S. they contributed only 30−40%. Using a search and matching model we show theoretically that the joint analysis of first and second moments offers general identification restrictions on the underlying causes for these differences. We find that a lower efficiency in the matching process can consistently explain the facts while alternative explanations such as employment protection, the benefit system, union power, or rigid earnings can not. We document that a lower matching efficiency due to lower occupational and regional mobility in Germany finds strong support in the data. Finally, we show that the highlighted matching friction leads in the model calibrated to the German economy to a substantial amplification and propagation of shocks.
    Keywords: Business Cycle Fluctuations; Labor Market Institutions; Unemployment; Endogenous Firing
    JEL: E32 E24
    Date: 2011–07–19
  22. By: David Backus; Mikhail Chernov; Stanley E. Zin
    Abstract: We propose two metrics for asset pricing models and apply them to representative agent models with recursive preferences, habits, and jumps. The metrics describe the pricing kernel’s dispersion (the entropy of the title) and dynamics (time dependence, a measure of how entropy varies over different time horizons). We show how each model generates entropy and time dependence and compare their magnitudes to estimates derived from asset returns. This exercise — and transparent loglinear approximations — clarifies the mechanisms underlying these models. It also reveals, in some cases, tension between entropy, which should be large enough to account for observed excess returns, and time dependence, which should be small enough to account for mean yield spreads.
    JEL: E44 G12
    Date: 2011–07
  23. By: Chetouane, Mabrouk; Lemoine, Matthieu; De la Serve, Marie-Elisabeth
    Abstract: Cet article vise à évaluer la croissance potentielle en France, en Allemagne et en zone euro au cours de la période postérieure à la crise de crédit de 2007-2008 jusqu’à l’horizon de prévision 2012. Une telle évaluation joue en effet un rôle central dans celle du déficit structurel et donc dans la définition des plans de consolidation. Après avoir présenté les effets possibles recensés par la littérature de la crise sur la croissance potentielle, nous utilisons pour nos évaluations des modèles à composantes inobservables. Ceux- ci permettent de réconcilier les approches dites traditionnelles, fondées sur l’utilisation d’une fonction de production et les approches statistiques basées sur des méthodes de filtrage. Nos évaluations montrent pour les différentes zones que la crise a eu un impact marqué sur la croissance potentielle dès 2009. En prévision, la croissance potentielle devrait rester atone à l’horizon 2012 pour la France et l’Allemagne, comme pour la zone euro agrégée. La faiblesse de la croissance potentielle s’explique en partie par un net repli de la contribution du facteur travail, notamment en France et en zone euro. Ce repli provient lui- même essentiellement de la montée du Nairu, excepté en Allemagne. L’Allemagne se distingue en effet du reste de la zone euro par une baisse continue du Nairu jusqu’à l’horizon 2012.
    Abstract: This article aims at evaluating potential growth for France, Germany and the euro area during the period from after the 2007-2008 credit crisis until 2012. Such an assessment plays a central role in the determination of the structural deficit and therefore in the definition of consolidation plans. After presenting the possible effects of the crisis on potential growth identified by the literature, we use for our evaluations an unobserved component model. This helps to reconcile the so-called traditional approaches, based on the use of a production function and the statistical approaches based on filtering methods. Our evaluations show for the different areas that the crisis has had a significant impact on potential growth starting in 2009; by 2012, potential growth should remain weak. The low potential growth is caused in part by a sharp decline in labor input, particularly in France and the euro area. This decline stems mainly from an increase of structural unemployment, except in Germany.
    Keywords: Financial crisis; unobserved component models; potential growth; crise financière; modèles à composantes inobservables; croissance potentielle;
    JEL: E31 C32
    Date: 2011
  24. By: Nina Cainarean; Eugenia Veverita; Petru Veverita
    Abstract: This study reviews the impact of the global financial crisis on public service delivery in the Republic of Moldova. It provides a background of the country’s development in the period prior to the crisis (2000 to 2007/2008) and presents the factors which determined the country’s fiscal performance during the crisis (2008-2010). The main aim of the study is to describe the changes in education and health financing and the associated changes in service delivery during the crisis. The presentation of the reforms in the social sector is necessary to set the stage for discussion and is not a primary goal of this study. In particular, the study analyzes the size and dynamics of public financing of education and healthcare and their intra-sector structure, as well as crisis management. It measures the impact the financial crisis had on the quality and reliability of public services and analyzes policy measures undertaken by the government to mitigate crisis’ impact. Conclusions and recommendations derived from the study should enable national policy-makers and international institutions supporting public finance reforms to improve the targeting of limited public resources both between and within individual sectors.
    Keywords: Economic Crisis, Economic Development, Fiscal Policy, Education, Healthcare
    JEL: E62 O10
    Date: 2011
  25. By: Schnabl, Gunther; Zemanek, Holger
    Abstract: Der Beitrag analysiert die inner-europäischen Leistungsbilanzungleichgewichte auf der Grundlage der Theorie der optimalen Währungsräume. Wir zeigen, dass die deutsche Wiedervereinigung nicht nur zur EWS-Krise 1992/93 führte, sondern auch der Ursprung der derzeitigen europäischen Schuldenkrise ist. Ein reduzierter deutscher Leistungsbilanzüberschuss würde das internationale Kreditrisiko deutscher Sparer reduzieren, aber die resultierende Kapitalknappheit in Europa würde die Wahrscheinlichkeit von Krisen und einer fortgesetzten monetären Expansion erhöhen. --
    Keywords: Leistungsbilanzen,Krise,Euro,Währungsunion,Kapitalexporte,Theorie der optimalen Währungsräume
    JEL: E21 F15 F32 F36
    Date: 2011
  26. By: Maarek, Paul; Decreuse, Bruno
    Abstract: We address the effects of FDI on the labor share in developing countries. Our theory relies on the impacts of FDI on productive heterogeneity in a frictional labor market. FDI have two opposite effects: a negative force originated by technological advance, and a positive force due to increased labor market competition between …firms. We test this theory on aggregate panel data through …fixed effects and system-GMM estimations. We …find a U-shaped relationship between the labor share in the manufacturing sector and the ratio of FDI stock to GDP. Most countries are stuck in the decreasing part of the curve. --
    Keywords: FDI,Matching frictions,Firm heterogeneity,Technological advance
    JEL: E25 F16 F21
    Date: 2011
  27. By: Backus, David; Chernov, Mikhail; Zin, Stanley E.
    Abstract: We propose two metrics for asset pricing models and apply them to representative agent models with recursive preferences, habits, and jumps. The metrics describe the pricing kernel’s dispersion (the entropy of the title) and dynamics (time dependence, a measure of how entropy varies over different time horizons). We show how each model generates entropy and time dependence and compare their magnitudes to estimates derived from asset returns. This exercise--and transparent loglinear approximations--clarifies the mechanisms underlying these models. It also reveals, in some cases, tension between entropy, which should be large enough to account for observed excess returns, and time dependence, which should be small enough to account for mean yield spreads.
    Keywords: asset returns; bond yields; disasters; habits; jumps; pricing kernel; recursive preferences
    JEL: E44 G12
    Date: 2011–07
  28. By: Jeremy Greenwood (University of Pennsylvania); Nezih Guner (Universitat Autonoma de Barcelona); Georgi Kocharkov (Universidad Carlos III de Madrid); Cezar Santos (University of Pennsylvania)
    Abstract: Marriage has declined since 1960. The drop is bigger for non-college educated individuals versus college educated ones. Divorce has increased. More so for the non-college educated vis à vis the college educated. Additionally, assortative mating has risen. People are more likely to marry someone of the same education level today than in the past. A model of marriage and divorce is calibrated/estimated to fit the postwar U.S. data. The contribution of different factors, such as skilled-biased technological progress in the market, labor-saving technological progress in the home, and the narrowing of the gender gap, to explaining these facts is gauged. Work in Process!
    Keywords: Assortative mating, education, female labor supply, household production, marriage and divorce, minimum distance estimation
    JEL: E13 J12 J22 O11
    Date: 2011–07

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