scholarly journals Thoughts on a Fiscal Union in EMU

2019 ◽  
Vol 20 (4) ◽  
pp. e360-e384 ◽  
Author(s):  
Niklas Gadatsch ◽  
Josef Hollmayr ◽  
Nikolai Stähler
Keyword(s):  
Risk Sharing ◽  
Large Scale ◽  
New Keynesian ◽  
Fiscal Union ◽  
Macroeconomic Variables ◽  
Asymmetric Shocks ◽  
Keynesian Model ◽  
Debt Dynamics ◽  
Tax Harmonisation

Abstract Using an estimated large-scale New Keynesian model, we assess the consequences of introducing a fiscal union within EMU. We differentiate between three different scenarios: public revenue equalisation, tax harmonisation and a centralised fiscal authority. Our results indicate that no country would significantly benefit from introducing any form of fiscal union. Comparing long-term, that is, steady state, effects we have winners and losers depending on the scenario. Differences in terms of business cycle statistics as well as in terms of risk sharing of asymmetric shocks are minor. This also explains why welfare differences are small across the fiscal union scenarios. A counterfactual exercise indicates that with a fiscal union regime already installed at the start of EMU, key macroeconomic variables would have reacted very similarly while debt dynamics would have changed notably.

scholarly journals Dynamic Debt Deleveraging and Optimal Monetary Policy

2020 ◽  
Vol 12 (2) ◽  
pp. 310-350 ◽  
Author(s):  
Pierpaolo Benigno ◽  
Gauti B. Eggertsson ◽  
Federica Romei
Keyword(s):  
Monetary Policy ◽  
Lower Bound ◽  
New Keynesian ◽  
New Keynesian Model ◽  
Optimal Monetary Policy ◽  
Natural Rate ◽  
Keynesian Model ◽  
Natural Rate Of Interest ◽  
Standard Framework

This paper proposes a postcrisis New Keynesian model that incorporates agent heterogeneity in borrowing and lending with a minimum set of assumptions. Unlike the standard framework, this model makes the natural rate of interest endogenous and dependent on macroeconomic policy. The main application is to study optimal monetary policy at the zero lower bound (ZLB). Such policy succeeds in raising the natural rate of interest by creating an environment that speeds up deleveraging and thus endogenously shortens the crisis and the duration of binding ZLB. Inflation should be front-loaded and should overshoot its long-term target during the ZLB episode. (JEL E12, E31, E32, E43, E52)

scholarly journals RAMSEY OPTIMAL POLICY IN THE NEW-KEYNESIAN MODEL WITH PUBLIC DEBT

2021 ◽  
pp. 1-27
Author(s):  
Jean-Bernard Chatelain ◽  
Kirsten Ralf
Keyword(s):  
Public Debt ◽  
Optimal Policy ◽  
Multiple Equilibria ◽  
New Keynesian ◽  
New Keynesian Model ◽  
Keynesian Model ◽  
Simple Rules ◽  
Debt Dynamics ◽  
Level Versus ◽  
The Interest Rate

In the discrete-time new-Keynesian model with public debt, Ramsey optimal policy eliminates the indeterminacy of simple-rules multiple equilibria between the fiscal theory of the price level versus new-Keynesian versus an unpleasant equilibrium. If public debt volatility is taken into account into the loss function, the interest rate responds to public debt besides inflation and output gap. Else, the Taylor rule is identical to Ramsey optimal policy when there is zero public debt. The optimal fiscal-rule parameter implies the local stability of public-debt dynamics (“passive” fiscal policy).

scholarly journals U.S. Monetary Policy Spillovers to Emerging Markets: Both Shocks and Vulnerabilities Matter

2021 ◽  
Vol 2021 (1321) ◽  
pp. 1-34
Author(s):  
Shaghil Ahmed ◽  
◽  
Ozge Akinci ◽  
Albert Queralto ◽  
◽  
...  
Keyword(s):  
Interest Rates ◽  
Emerging Market ◽  
Aggregate Demand ◽  
Central Banks ◽  
New Keynesian ◽  
Inflation Expectations ◽  
Balance Sheets ◽  
Macroeconomic Variables ◽  
Keynesian Model ◽  
Monetary Policy Spillovers

Using a macroeconomic model, we explore how sources of shocks and vulnerabilities matter for the transmission of U.S. monetary changes to emerging market economies (EMEs). We utilize a calibrated two-country New Keynesian model with financial frictions, partly-dollarized balance sheets, and imperfectly anchored inflation expectations. Contrary to other recent studies that also emphasize the sources of shocks, our approach allows the quantification of effects on real macroeconomic variables as well, in addition to financial spillovers. Moreover, we model the most relevant vulnerabilities structurally. We show that higher U.S. interest rates arising from stronger U.S. aggregate demand generate modestly positive spillovers to economic activity in EMEs with stronger fundamentals, but can be adverse for vulnerable EMEs. In contrast, U.S. monetary tightenings driven by a more-hawkish policy stance cause a substantial slowdown in activity in all EMEs. Our model also captures the challenging policy tradeos that EME central banks face. We show that these tradeoffs are more favorable when inflation expectations are well anchored.

A NOTE ON ROBUST MONETARY POLICY AND NON-ZERO TREND INFLATION

2018 ◽  
Vol 24 (6) ◽  
pp. 1574-1594 ◽  
Author(s):  
Kohei Hasui
Keyword(s):  
Monetary Policy ◽  
Model Uncertainty ◽  
New Keynesian ◽  
Macroeconomic Fluctuations ◽  
Macroeconomic Variables ◽  
Control Techniques ◽  
Princeton University ◽  
Keynesian Model ◽  
Trend Inflation ◽  
The One

This paper studies how model uncertainty influences economic fluctuation when trend inflation is high. We introduce Hansen and Sargent’s [(2008) Robustness, Princeton University Press] robust control techniques into a New Keynesian model with non-zero trend inflation. We reveal the following three points. First, we find that robust monetary policy responds more aggressively. This aggressiveness increases with trend inflation. Second, as the trend inflation rises, the response of macroeconomic variables is larger under robust policy. Third, stronger robustness tends to lead to indeterminate equilibrium as trend inflation increases. Consequently, the economy might be volatile when trend inflation is high due to robustness from the view of both variance and determinacy. We interpret the results as indicating that the model uncertainty might be the one of the factors causing large macroeconomic fluctuations when trend inflation is high.

scholarly journals PENSION FUND RESTORATION POLICY IN GENERAL EQUILIBRIUM

2019 ◽  
Vol 24 (7) ◽  
pp. 1785-1814
Author(s):  
Pim B. Kastelein ◽  
Ward E. Romp
Keyword(s):  
Risk Sharing ◽  
Pension Fund ◽  
Pension Funds ◽  
New Keynesian ◽  
Defined Benefit ◽  
Defined Contribution ◽  
Negative Effects ◽  
Keynesian Model ◽  
Intergenerational Risk Sharing ◽  
The Business Cycle

When the financial positions of pension funds worsen, regulations prescribe that pension funds reduce the gap between their assets (invested contributions) and their liabilities (accumulated pension promises). This paper quantifies the business cycle effects and distributional implications of various types of restoration policies. We extend a canonical New-Keynesian model with a tractable demographic structure and, as a novelty, a flexible pension fund framework. Fund participants accumulate inflation-indexed or non-indexed benefits and funding adequacy is restored by revaluing previously accumulated pension wealth (Defined Contribution (DC)) or changing the pension fund contribution rate on labor income (Defined Benefit (DB)). Economies with DC pension funds respond similarly to adverse capital quality shocks as economies without pension funds. DB pension funds, however, distort labor supply decisions and exacerbate economic fluctuations. While DB pension funds achieve intergenerational risk-sharing, welfare analyses indicate that the negative effects of the induced distortions are sizeable.

Evolution of Large-Scale Coronal Structures

1994 ◽  
Vol 144 ◽  
pp. 29-33
Author(s):  
P. Ambrož
Keyword(s):  
Magnetic Field ◽  
Field Line ◽  
Large Scale ◽  
Coronal Magnetic Field ◽  
Source Surface ◽  
Solar Cycles ◽  
Characteristic Relationship ◽  
The Magnetic Field ◽  
Coronal Structures

AbstractThe large-scale coronal structures observed during the sporadically visible solar eclipses were compared with the numerically extrapolated field-line structures of coronal magnetic field. A characteristic relationship between the observed structures of coronal plasma and the magnetic field line configurations was determined. The long-term evolution of large scale coronal structures inferred from photospheric magnetic observations in the course of 11- and 22-year solar cycles is described.Some known parameters, such as the source surface radius, or coronal rotation rate are discussed and actually interpreted. A relation between the large-scale photospheric magnetic field evolution and the coronal structure rearrangement is demonstrated.

Computer Analyses in Preventive Health Research

1967 ◽  
Vol 06 (01) ◽  
pp. 8-14 ◽  
Author(s):  
M. F. Collen
Keyword(s):  
Medical Research ◽  
Preventive Medicine ◽  
Health Research ◽  
Large Scale ◽  
Preventive Health ◽  
New Era ◽  
Large Numbers ◽  
Normal Test ◽  
Computer Analyses

The utilization of an automated multitest laboratory as a data acquisition center and of a computer for trie data processing and analysis permits large scale preventive medical research previously not feasible. Normal test values are easily generated for the particular population studied. Long-term epidemiological research on large numbers of persons becomes practical. It is our belief that the advent of automation and computers has introduced a new era of preventive medicine.

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