Browsing ADEMU Working Papers Series by Issue Date

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  • Job uncertainty and deep recessions
    Ravn, Morten O.; Sterk, Vincent (2015-07)
    This paper proposes a theory in which aggregate shocks also produce idiosyncratic risk which in turn introduces a demand channel that we argue is relevant for understanding the Great Recession. We study a model in which ...
  • Unemployment (fears) and deflationary spirals
    Den Haan, Wouter J.; Rendah, Pontus; Riegler, Markus (2015-09)
    The interaction of incomplete markets and sticky nominal wages is shown to magnify business cycles even though these two features – in isolation – dampen them. During recessions, fears of unemployment stir up precautionary ...
  • Capital taxation and globalization
    Correia, Isabel (2015-10)
    The decline of capital taxation is associated with efficiency gains.We show that, when agents are heterogeneous, equity concerns can change the policy recommendation driven by efficiency. Given the empirical evidence on ...
  • The effects of government spending endogeneity on estimated multipliers in the U.S.
    Moura, Alban (2015-11)
    This paper uses an estimated sticky-price model to identify endogenous movements in government consumption in the U.S. economy. Two feedback effects are considered, one originating from the stock of public debt and one ...
  • Fiscal unions redux
    Kehoe, Patrick J.; Pastorino, Elena (Universitat Pompeu Fabra, 2015-11)
    Before the advent of sophisticated international financial markets, the widely accepted belief was that within a monetary union, a union-wide authority orchestrating fiscal transfers between countries is necessary to provide ...
  • An overview of legal aspects of risk sharing
    Leino, Päivi (2015-12)
    This paper discusses the legal and institutional aspects relating to risk-sharing mechanisms at EU level. For this purpose, an attempt will first be made to define a “risk-sharing mechanism” and the relevant legal framework, ...
  • The effect of firm cash holding on monetary policy
    Adão, Bernardino; Silva, André C. (2015-12)
    Firm cash holdings increased substantially from 1980 to 2013. The overall distribution of firm cash holdings changed in the same period. We study the implications of these changes for monetary policy. We use Compustat data ...
  • EMU and national constitutional conditions to long term change
    Fasone, Cristina; Beukers, Thomas (2015-12)
    Significant long-term developments in EMU are conditioned not only by the current EU legal framework but also by national constitutions. Conditions are posed by constitutional courts interpreting the constitution, by putting ...
  • Macroeconomic stabilization, monetary-fiscal interactions, and Europe's monetary union
    Corsetti, Giancarlo; Dedola, Luca; Jarocinski, Marek; Mackowiak, Bartosz; Schmidt, Sebastian (2016)
    The euro area has been experiencing a prolonged period of weak economic activity and very low inflation. This paper reviews models of business cycle stabilization with an eye to formulating lessons for policy in the euro ...
  • Risk-sharing and contagion network
    Cabrales, Antonio; Gottardi, Piero; Vega-Redondo, Fernando (2016)
    We investigate the properties of financial networks that allow to optimally solve the trade-off between higher risk-sharing and contagion. With continuous shock distributions, the optimum features the segmentation of the ...
  • The dark corners of the labor market
    Sterk, Vincent (2016-01)
    Standard models predict that episodes of high unemployment are followed by recoveries. This paper shows, by contrast, that a large shock may set the economy on a path towards very high unemployment, with no recovery in ...
  • Rethinking optimal currency areas
    Chari, V. V.; Dovis, Alessandro; Kehoe, Patrick J. (2016-02)
    The traditional Mundellian criterion, which implicitly assumes commitment to monetary policy, is that countries with similar shocks should form unions. Without such commitment a new criterion emerges: countries with ...
  • Fiscal consolidation in a disinflationary environment: price vs. quantity-based measures
    Pappa, Evi; Sajedi, Rana; Vella, Eugenia (2016-02)
    An important feature of the current economic conditions in the EU, which challenges the design and implementation of macroeconomic policy, is inflation uncertainty. With monetary policy at the zero lower bound, and inflation ...
  • Collusion constrained equilibrium
    Dutta, Rohan; Levine, David K.; Modica, Salvatore (2016-02)
    We study collusion within groups in non-cooperative games. The primitives are the preferences of the players, their assignment to non-overlapping groups and the goals of the groups. Our notion of collusion is that a group ...
  • The new economic component of EMU: a lawful and effective design?
    Kilpatrick, Claire (2016-03)
    This analysis aims to set out clearly and succinctly the legal arrangements for macro-economic governance in EMU, legal challenges to that regime and different ways of assessing that new regime. It focuses on changes ...
  • Bank opacity and financial crises
    Jungherr, Joachim (2016-03)
    This paper studies a model of endogenous bank opacity. In the model, bank opacity is costly for society because it reduces market discipline and encourages banks to take on too much risk. This is true even in the absence ...
  • Breaking the spell with credit-easing: self-confirming credit crises in competitive search economies
    Gaballo, Gaetano; Marimon, Ramon (2016-03)
    We show that credit crises can be Self-Confirming Equilibria (SCE), which provides a new rationale for policy interventions like, for example, the FRB’s TALF credit-easing program in 2009.We introduce SCE in competitive ...
  • Exit expectations and debt crises in currency unions?
    Kriwoluzky, Alexander; Müller, Gernot J.; Wolf, Martin (2016-04)
    Membership in a currency union is not irreversible. Exit expectations may emerge during sovereign debt crises, because exit allows countries to reduce their liabilities through a currency redenomination. As market participants ...
  • Voter participation with collusive parties
    Levine, David K.; Mattozzi, Andrea (2016-04)
    We re-examine the theory of rational voter participation where voting is by two collusive parties enforcing social norms through costly peer punishment. The model nests both the ethical voter model and the pivotal voter ...
  • Asymmetric trade liberalizations and current account dynamics
    Barattieri, Alessandro (2016-04)
    In this paper, I show a strong positive correlation between the value-added share of manufacturing in 2000 and current account balances in 2007 for the Euro area countries. I propose asymmetries in the timing of trade ...

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