Suchergebnisse

Este documento investiga los efectos sobre el bienestar y las propiedades de estabilización económica de un esquema de transferencias fiscales entre miembros de una unión monetaria sujetos a choques de riesgo soberano. El esquema consiste en reglas de transferencia entre países que se activan cuando los diferenciales de riesgo soberano se amplían. Este esquema se incorpora en un modelo con fricciones financieras. En particular, los bancos de cada país tienen bonos del Gobierno en sus carteras y, por eso, están expuestos al riesgo soberano. Cuando este aumenta, el valor patrimonial de los bancos baja, obligándoles a contraer el crédito al sector privado y, al mismo tiempo, a elevar los tipos de interés. Este documento muestra que, cuando la política fiscal en cada país no es distorsionadora, las transferencias fiscales mejoran el bienestar y la estabilidad macroeconómica. Esto se debe a que las transferencias fiscales pueden reducir la exposición de los bancos a la deuda del Gobierno, liberando el suministro de crédito al sector privado. Por el contrario, cuando la política fiscal interna es distorsionadora, las transferencias fiscales causan pérdidas de bienestar, a pesar de estabilizar la economía. Este resultado surge porque las distorsiones causadas por el financiamiento del esquema superan los efectos positivos de las transferencias fiscales al suavizar el ajuste de la economía afectada por el choque ; This paper investigates the welfare and economic stabilization properties of a fiscal transfers scheme between members of a monetary union subject to sovereign spread shocks. The scheme, which consists of cross-country transfer rules triggered when sovereign spreads widen, is incorporated in a two-country model with financial frictions. In particular, banks hold government bonds in their portfolios, being exposed to sovereign risk. When this increases, a drop bank's equity value forces them to contract credit and to raise lending rates at the same time as they retain funds to build up their net worth. I show that, when domestic fiscal policy is not distortionary, fiscal transfers improve welfare and macroeconomic stability. This is because fiscal transfers can reduce banks' exposure to government debt, freeing credit supply to the private sector. On the contrary, when domestic fiscal policy is distortionary, fiscal transfers cause welfare losses, despite stabilizing the economy. This result arises because the distortions caused by funding the scheme outweigh the positive effects of fiscal transfers in smoothing the adjustment of the economy hit by the shock

This paper considers a scheme of fiscal transfers between member states of a monetary union subject to sovereign spread shocks. The scheme consists of a set of cross-country transfer rules triggered when sovereign spreads widen. I study its implementation in a twocountry model with financial frictions estimated for Portugal and the Eurozone. The model illustrates how domestic fiscal policy is unable to buffer the widening of sovereign spreads when public debt is high and spreads are responsive to the fiscal outlook. On the contrary, because transfers are made between governments, they alleviate the strain caused on the fiscal stance directly and reduce the pass-through of sovereign risk to private lending to firms. I find that, for welfare to improve for all member states, their relative size and fiscal profile need to be nearly symmetric. Nevertheless, I show that for a cost to the remaining members states significantly smaller than the benefits they derive from being part of the union, a small country like Portugal can secure sizeable increases in life-time consumption. ; The ADEMU Working Paper Series is being supported by the European Commission Horizon 2020 European Union funding for Research & Innovation, grant agreement No 649396.

Defence date: 10 March 2016 ; Examining Board: Prof. Evi Pappa, EUI, Supervisor; Prof. Juan Dolado, EUI; Prof. Mariano Kulish, UNSW Business School; Prof. Evangelos Vassilatos, Athens University of Economics and Business. ; This thesis consists of three papers on open economy macroeconomics. The first paper investigates the welfare implications of a fiscal transfer rule between members of a monetary union. I build a two-country model where banks are exposed to sovereign risk. I show that the costs of expansionary fiscal policy can outweigh the benefits due to the added pressure on sovereign spreads. This is magnified when the fiscal stance is weak. On the contrary, inter-governmental transfers mitigate the fiscal strain and provide stimulus to the economy. Yet, I find that sound fiscal stances are crucial both for governments to countervail shocks on their own, and also to grant support for the implementation of the transfer scheme. The second paper lays out an empirical model to compare the propagation of exogenous shocks in a small open economy subject to structural change. As the identification of shocks is time invariant, I am able to investigate the difierences that pertain only to structural change. I estimate the model to Australia and find a regime transition occurring in 1990. The responses of domestic variables to the shocks are less exacerbated and adjust quicker after the transition. I find that increases in commodity prices are only infiationary after 1990 and as a reaction to world demand shocks, whereas commodity-market shocks are recessionary. In the last paper, I study the implications of relative wage rigidities for monetary policy in a small commodity-exporting economy. I present a model where wages in the non-commodity sector are indexed to wages in the commodity sector, generating relative wage rigidities. For a high degree of indexation, I find some inflation is desirable. As wages are set in nominal terms, inflation partially offsets the effects of indexation on real wages. Nevertheless, as indexation is itself inflationary, the response of monetary policy to inflation still needs to be stronger. I show that policy misspecification is more problematic for higher degrees of indexation.

High unemployment and fiscal austerity during the recent crisis have led to significant migration outflows from the periphery of the euro area. This paper introduces endogenous migration both for the unemployed and employed members of the household in a small open economy DSGE model with search and matching frictions. The government can use public spending, unemployment benefits, or labor income taxes as fiscal consolidation instruments. A tax-based consolidation induces the highest migration outflows in the short run, which exacerbates the induced GDP contraction. Cuts in unemployment benefits induce the highest outflows of jobseekers in the medium run, but with more favorable effects on GDP and unemployment as the domestic wage adjusts downwards. The latter also leads to a very persistent increase in the intensity with which current workers look for a job abroad. Government spending cuts, on the other hand, have a small impact on migration. A repatriation policy, modelled as a higher utility cost of migration, generates a return of migrants, leading to a boost in aggregate demand, a fall in real wages and an increase in unemployment. ; The ADEMU Working Paper Series is being supported by the European Commission Horizon 2020 European Union funding for Research & Innovation, grant agreement No 649396.

First published: June 2018 ; We construct a model of a monetary union to study fiscal consolidation in the periphery of the euro area, through cuts in public-sector wages or hiring when the nominal interest rate is constrained at its lower bound. Consolidation induces a positive wealth effect that increases demand, as well as a reallocation of workers towards the private sector, which together boost private activity. However, in a low-inflation environment, demand is suppressed and the private sector is not able to absorb the additional workers. Comparing the two instruments, cuts in public hiring increase unemployment persistently in this environment, while wage cuts can reduce it. Regions with higher mobility of labor between the two sectors are able to consolidate more effectively. Price flexibility is also key at the zero lower bound: for a higher degree of price rigidity in the periphery, consolidation becomes harder to achieve. Consolidations can be self-defeating when the public good is productive. ; FCT ; European Union's Horizon 2020 Program [649396]