In an overlapping generations economy with incomplete insurance markets, the introduction of an employment fund (akin to the one introduced in Austria in 2003, also known as `Austrian backpack') can enhance production ...

Sovereign risk premia reflect investors’ beliefs for the equilibrium and off –equilibrium actions of international agents. This paper investigates the international dimension of self-fulfilling sovereign debt crises and ...

On 6 December 2017, the European Commission presented its policy package on ‘Completing Europe’s Economic and Monetary Union’. Some of the proposals it entails aim at improving the democratic accountability of the governance ...

We study how small open economies can escape from deation and unemployment in a situation where the world economy is permanently depressed. Building on the framework of Eggertsson et al. (2016), we show that the transition ...

How much does your wage depend on what you learned, for whom you work, or what job you do? Using largely unexplored administrative data from Germany allows us to relate 80% of wage variation to observable characteristics ...

The combination of downward nominal wage rigidity and pegged exchange rate creates an externality which leads to excessive wage inflation (Schmitt-Groh_e and Uribe, 2016). This paper re-examines this result assuming that ...

We introduce long-term debt (and a maturity choice) into a standard model of firm financing and investment. This allows us to study two distortions of investment: (1.) Debt dilution distorts firms’ choice of debt which has ...

When discussing the level for the target inflation in a Monetary Union typically questions of efficacy of stabilization of monetary policy or conditions for the fulfilment of an optimal monetary currency are in the forefront. ...

The sovereign debt crisis served to highlight the limitations of trying to use a Union budget in which all Member States participate to perform functions corresponding to a monetary union in which not all Member States ...