The paper re‐examines the real effects of credible disinflation in the presence of real wage rigidities and non‐linear dynamics. A credible, gradual

We analyze the implications of trend growth for optimal monetary policy in the presence of search and matching unemployment. We show that trend growth inter- acts importantly with the inefficiencies stemming from the labor market. Higher trend growth...

Due to their indeterminacies, static and dynamic factor models require identifying assumptions to guarantee uniqueness of the parameter estimator. The indeterminacy of the parameter estimator with respect to an orthogonal transformation is known as...

This paper analyzes Germany’s unusual labor market experience during the Great Recession. We estimate a general equilibrium model with a detailed labor market block for post-unification Germany. This allows us to disentangle the role of institutions...

We identify the effects of the supply of mortgage credit on house prices, using the politicallydirected credit-targeting regime of Venezuela as quasi-natural experiment. We find a large effect of the supply of housing credit on time path of house...

This paper extends the efficiency wages/partially adaptive expectations Phillips curve, otherwise known as the price-price Phillips curve, from a closed economy context to an open economy one with both commodity trade and capital mobility. We also...

We analyse domestic and cross-border effects of fiscal policy in a two-region business cycle model of a monetary union. Without relying on debt consolidation via spending reversals along the lines of Corsetti, Meier and Mueller (2010) and Corsetti...

In the Great Recession most OECD countries used short-time work (publicly subsidized working time reductions) to counteract a steep increase in unemployment. We show that short-time work can actually save jobs. However, there is an important...

This paper characterizes long-run and short-run optimal fiscal policy in the labor selection framework. In a calibrated non-Ramsey decentralized equilibrium, labor market volatility is inefficient. Keeping fixed the structural parameters, the Ramsey...

This paper extends the efficiency wages/partially adaptive expectations Phillips curve, otherwise known as the price-price Phillips curve, from a closed economy context to an open economy one with both commodity trade and capital mobility. We also...