Monetary, financial and fiscal fragility in 2020s
Section snippets
Keynote lectures
Lawrence Christiano delivered a keynote lecture on “Financial Frictions in Macroeconomics”. In his talk, he refers to recent research on Macroeconomics and Finance, with a focus on the empirical work conducted on the United States in particular. The starting point of his analysis is the balance sheet of the whole financial system: the frictions identified on the liabilities side (that captures the borrowing that the US financial system does from the public) emphasize the banking system itself
Crisis
Jonathan Benchimol and Sergey Ivashchenko show in their article “Switching Volatility in a Nonlinear Open Economy” how uncertainty can drastically change countries behavior and policies around a crisis. They put a focus on the effects of foreign shocks on the economies, by considering the Global Financial Crisis (GFC) effects in the Euro area. The authors estimate an open-economy nonlinear dynamic stochastic general equilibrium (DSGE) model for the Euro area and United States including
Monetary and fiscal policies spillovers
The article “Echo over the Great Wall: Spillover Effects of QE Announcements on Chinese Yield Curve” by Mucai Lina and Linlin Niu examines the spillover effects of announcements of quantitative easing (QE) conducted in several developed economies on the Chinese Treasury yield curve. In particular, the authors show that among the QE announcements from the central banks of US, UK, Eurozone, and Japan, significant impacts on China’s Treasury yields were exerted by only the US QE, a finding that
Fiscal policies
In their paper “Fiscal policy and fiscal fragility: Empirical evidence from the OECD”, Makram El-Shagi and Gregor Von Schweinitz investigate to which extent the fiscal position affects fiscal multipliers in 17 OECD countries over the period 1978 to 2009. By using disaggregate data on fiscal policy shocks, they can document that consolidation through spending is preferable to consolidation through tax increases. Further, they build different models using a large battery of alternative fragility
Current account and macroeconomic stability
The article “Housing prices and Trade surpluses in China: An Inter-temporal Approach” by Qiuyu Chen, Ling Feng, Zhiyuan Li and Ching-Yi Lin analyzes the relation between housing prices and trade surpluses in China. To this end, the authors build an inter-temporal current account model and show the existence of two channels having opposite effects: the first channel is the intra-temporal substitution channel (it discourages current consumption of tradable goods, leading to trade surpluses); the
Acknowledgements
We wish to thank Joshua Aizenman, Co-Editor of the Journal of International Money and Finance for giving us the opportunity to publish this special issue, the referees, discussants and all participants at the 5th HenU/INFER Workshop on Applied Macroeconomics for their valuable comments and suggestions. Many thanks to Randall Wright and Lawrence Christiano, two of our keynote speakers, for their talks and for accepting to contribute to this special issue.
References (0)
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