Three Essays On The Global Financial Crisis And Fiscal Policy
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Three Essays On The Global Financial Crisis And Fiscal Policy
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Author : Kyonghoon Kim
language : en
Publisher:
Release Date : 2016
Three Essays On The Global Financial Crisis And Fiscal Policy written by Kyonghoon Kim and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with Financial crises categories.
Essays On The Global Financial Crisis
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Author : Heiko Hesse
language : en
Publisher:
Release Date : 2016
Essays On The Global Financial Crisis written by Heiko Hesse and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with categories.
The Global Financial Crisis has been a watershed event not only for many advanced economies but also emerging markets around the world. This book brings together research and policy work over the last nine years from staff at the IMF. It covers a wide range of issues such as the origins of the financial crisis, the policy response, spillovers and contagion, case studies, bank stress testing, and debt sustainability and sovereign debt restructuring.
Three Essays On Financial Crisis
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Author : Michael Pomerleano
language : en
Publisher:
Release Date : 2007
Three Essays On Financial Crisis written by Michael Pomerleano and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007 with categories.
Global Economic Financial Crisis
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Author :
language : en
Publisher:
Release Date : 2009-01-01
Global Economic Financial Crisis written by and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009-01-01 with Economic history categories.
A collapse in housing prices in the United States in the middle of 2007 led to a rise in defaults in loan repayments and then rapidly to major losses in financial institutions across the world. The financial crisis of 2007 and 2008 took little time to turn into the global economic crisis of 2008 and 2009, leaving no country and no sector untouched and has become the worst contraction since the Depression of the 1930s. The structure of financial innovation that drove growth for close to a quarter of a century has turned out to be a house of cards. Governments and central banks are now rethinking the organization and role of banks. The incentives given to executives of the financial institutions to promote profits at all costs have been put under scrutiny. This volume puts together a collection of essays on a number of aspects of the global economic and financial crisis that were first published in the Economic & Political Weekly in early 2009. Economists and policy makers from across the world cover six areas from a global and Indian perspective. One set of articles discusses the structural causes of the financial crisis. A second focuses on banking and offers solutions for the future. A third examines the role of the US dollar in the unfolding of the crisis. A fourth area of study is the impact on global income distribution. A fifth set of essays takes a long-term view of policy choices confronting the governments of the world. A separate section assesses the downturn in India, the state of the domestic financial sector, the impact on the informal economy and the reforms necessary to prevent another crisis. This book is essential reading for anyone interested in and concerned about the global economic and financial crisis.
Four Essays On Fiscal Policy After The Global Financial Crisis
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Author : Francesco Molteni
language : en
Publisher:
Release Date : 2013
Four Essays On Fiscal Policy After The Global Financial Crisis written by Francesco Molteni and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013 with categories.
This dissertation is divided in two sections. The first section addresses the question of the consequences of fiscal policy interventions on the economy and the second section analyzes the issue of the liquidity of European Government bonds during the recent financial crisis, the effect ofliquidity shock on these securities and consequences ofpolicy responses. The frrst chapter studies the impact of a discretionary government spending shock on economic activity and other macroeconomic variables by using an alternative two-step procedure for the identification of the govemment spending shock. The second chapter analyzes the effects of a combination of fiscal and monetary policy shocks on macroeconomic and financial variables using a Time Varying Parameters Factor Augmented VAR (TVP-FA VAR) mode!. The third chapter investigates the European market of repurchase agreements and shows that government bonds represent a key fraction of the collateral in these transactions. lt also examines the effects of a rise in haircuts on the value of govemment bonds and shows that this mechanism may represent a channel in the transmission mechanism of banking and sovereign-debt crises in the periphery of the Eurozone. Following the empirical findings of the third chapter, the last chapter proposes a DSGE model with financial frictions to assess the impact of a negative liquidity shock and the consequences ofunconventional policy.
Essays On Fiscal Monetary And Macroprudential Policy
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Author : Christopher Johnson
language : en
Publisher:
Release Date : 2020
Essays On Fiscal Monetary And Macroprudential Policy written by Christopher Johnson and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020 with categories.
My dissertation investigates policy-oriented issues relating the the Great Recession from a macro-financial perspective. The first chapter focuses on macroprudential policy in the context of the Global Financial Crisis. The second chapter evaluates the effectiveness of fiscal stimulus in response to the Great Recession. The third chapter considers welfare-maximizing monetary policy when the liquidity of assets depends on the opinions of investors. A striking feature of the Great Recession was that all G7 countries experienced a simultaneous decline in economic activity. Two crucial developments prior to the crisis were the rise of non-bank financial intermediation, or shadow banking, and increased trade in asset-backed securities around the world. In the first chapter of my dissertation, I describe the extent to which shadow banking and securitization contributed to the high degree of international comovement during the Great Recession, which largely resulted from the collapse of the US housing bubble. In order to address this, I utilize a novel two-country real business cycle model with financial intermediation disaggregated between commercial and shadow banking in both countries, the latter of which specializes in securitization. When a negative country-specific shock occurs, both countries experience a simultaneous decline in both real and financial economic activity. The shock is transmitted across borders through a balance sheet channel, and is then amplified by the high leverage of shadow banks. On the policy front, I find that when capital controls are imposed on securities originated by the country where a negative shock occurs, both the transmission and amplification factors are reduced. In response to the Great Recession, fiscal stimulus was utilized with the American Recovery and Reinvestment Act (ARRA) of 2009. The effectiveness of fiscal stimulus has been well-documented through empirical estimates of fiscal multipliers. However, the validity of these measures came into question following the ARRA, with most criticisms regarding endogeneity. In 2011, Robert Barro wrote in the Wall Street Journal that the studies the Obama administration relied on were dependent upon models that ``substitute assumptions for identification.'' The assumptions in question are the recursive structures involving the endogenous variables utilized in these models, also known as a Cholesky ordering. In the second chapter of my dissertation, I test the validity of Cholesky ordering in the context of measuring fiscal multipliers. Using a novel iterative projection instrumental variable approach in a structural vector autoregressive framework, I find strong evidence in the rejection of every possible recursive ordering among standard endogenous variables utilized throughout the literature. I also find new estimates of fiscal multipliers that do not rely on a Cholesky ordering. My estimates are conservative relative to the rest of the literature, with fiscal multipliers that are economically and statistically significant after four quarters, but disintegrate within eight quarters. In the third chapter of my dissertation, I consider how differences of opinion among investors affect the liquidity value of assets. I use a monetary framework in which money and risky assets can facilitate trade. While the future value of money is agreed upon among investors, the risky asset is opinion-sensitive such that traders may disagree on its future value. This results in a pecking order theory of trade, which depends on the perceptions of the traders in question. I find that optimists prefer to use money instead of assets as a method of payment, whereas pessimists prefer to use assets instead of money. Intuitively, optimists value assets for their future return value, so they would rather hold onto their assets to realize those returns. Pessimists expect less favorable returns on their assets, so they are willing to part ways with them. Pessimists buys assets because there is always the possibility that they meet an optimist to trade with, by which the terms of trade will be favorable for pessimists. Regarding monetary policy, the Friedman rule is welfare-maximizing. Additionally, monetary policy can alter the composition of investors in the asset market. Specifically, lowering the nominal interest rate drives pessimists out of the asset market.
Essays On Monetary Fiscal And Macroprudential Policy Nexus In Indonesia
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Author : Danny Hermawan Adiwibowo
language : en
Publisher:
Release Date : 2014
Essays On Monetary Fiscal And Macroprudential Policy Nexus In Indonesia written by Danny Hermawan Adiwibowo and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with categories.
Credit/GDP to avoid the buildup of excessive risks, macro prudential policies become quantitatively more important. The second chapter based on premise that monetary policy has played a prominent stabilization role in many countries during the global financial crises, but fiscal policy has been seen as either sub-optimal or less effective. There has been renewed interest in fiscal policy in small open economies such as the UK and European periphery where austerity took place amidst low inflation and accompanied by internal or external imbalances. In an emerging economy, a larger expected share of nonRicardian agents and extent of real and nominal rigidities would be expected to create a larger potential role for fiscal policy in macro-economic stabilization and strengthening the resilience of the economy. Since we focused on monetary and fiscal policy only, there is no financial friction here but instead we developed a small open economy model. The model is estimated for the Indonesian economy, using a Bayesian approach to explore the role of fiscal policy in the existence of nonRicardian households. The model also features sticky prices and wages, nonRicardian agents and tax distortions to explore (i) the potential role for fiscal policy in stabilization, and (ii) monetary policy and fiscal policy interaction more generally. We found that fiscal policy does contribute to macroeconomic stabilization in Indonesia with its countercyclical policy in terms of fiscal expenditure and a tax response to debt that ensures solvency. However, fiscal policy should thanks to a large estimated share of nonRicardians households because they create an important role for fiscal policy, while price and wage rigidities and distortionary taxes are not. The fiscal debt also plays an important shock absorber role, allowing active fiscal stabilization and absorption of exchange rate valuation effects on the stocks of debt and reserves. In the third chapter, we assessed the problem of large and persistent global imbalances in the recent years that have changed the behavior of capital flows across countries, particularly in the emerging market. After the global financial crisis in the late 2000s, the emerging market has experienced massive capital inflows due to the strong countercyclical policy in the advanced economy. These inflows lead to excessive credit growth and booms in asset prices in the emerging market, including Indonesia. In general, this massive global financial cycle has amplified the business cycle and one of the option to deal with the so-called enhanced trillema is focus on the excessive leverage and credit growth as well as some forms of capital control such as tax on non-core liabilities. Therefore, in this chapter, we combine the model from the first and second chapters, mainly the macro prudential policy and non Ricardian households issue, and develop a New-Keynesian DSGE model for a small open economy, and estimate it for the Indonesian economy. The parameter estimation process uses Bayesian approach to explore the role of macro prudential policy and tax in non-core liabilities as one form of the capital control policy. Therefore, with those policy options, this research explores the potential role of each policy to mitigate the massive amplification of the domestic business cycle and finding an optimal policy choice c 2014 Danny Hermawan Adiwibowo ALL RIGHTS RESERVED.
Three Essays On Financial Crises
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Author : Haibin Zhu
language : en
Publisher:
Release Date : 2001
Three Essays On Financial Crises written by Haibin Zhu and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2001 with Banks and banking categories.
Three Essays In Monetary And Macroprudential Policies
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Author : Benedikt Mario Kolb
language : en
Publisher:
Release Date : 2017
Three Essays In Monetary And Macroprudential Policies written by Benedikt Mario Kolb and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017 with Global Financial Crisis, 2008-2009 categories.
This thesis focuses on recent monetary and macroprudential policies addressing the Financial Crisis. Chapter 1 stresses the role of central-bank communication. In particular, shocks derived from movements in federal funds futures prices during monetary policy announcement days have become popular for analysing U.S. monetary policy. While the literature often considers only surprise changes in the policy rate ("action shocks"), we distinguish between action and "communication shocks" (surprise announcements about future rates), using a novel decomposition of futures price movements. Our results indicate that communication shocks are the main driver of U.S. monetary policy shocks and that they explain a substantial share of variation in production. Chapter 2 turns to a macroprudential topic: How will a tightening in aggregate bank capital requirements affect the real economy? In this paper, we investigate this using a narrative index of regulatory US bank capital requirement changes for the period 1980M1 to 2016M8. Our results robustly suggest that a tightening in capital requirements leads to a temporary drop in lending and economic activity. The aggregate capital ratio and the level of bank capital increase permanently. Our results suggest that permanently higher capital requirements have no lasting negative effect on the real economy. Finally, Chapter 3 looks at asset purchases by the ECB. Their declared goal is to revive inflation, but purchases of which asset will be best suited for this? I address this question in a DSGE model with a role for three different asset classes: Government bonds, securitised financial assets and corporate sector bonds, which affect the economy via different channels. I investigate the impact of asset purchases in an environment of low inflation and a policy rate at the zero lower bound. Purchases of government bonds appear most effective in countering disinflationary episodes, while those of securitised assets have less impact.
Essays On Fiscal And Macro Prudential Policies With Credit Market Frictions
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Author : Sofia Kalantzi
language : en
Publisher:
Release Date : 2016
Essays On Fiscal And Macro Prudential Policies With Credit Market Frictions written by Sofia Kalantzi and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with Business cycles categories.
This dissertation focuses on how fiscal, and macro-prudential policies interact with financial market frictions. In particular, it addresses some of the key facts of the recent global financial crisis and provides an intuition of why different policies were implemented by many countries in order to mitigate the adverse effects of the financial crisis and how those policies are transmitted in the presence of financial market imperfections. This dissertation opens the discussion of the different welfare implications of alternative policies that seek to stabilize the economy as well as their different real effects in the economy. The dissertation consists of three main chapters. In the first chapter I document empirically a negative relationship between shocks to government spending and credit spreads. Using a SVAR methodology on US data, I show that after a positive shock to government spending, credit spreads drop up to 14 basis points. The analysis shows that it is in particular government investment that has a negative effect on the spreads as opposed to government consumption. Given this empirical evidence, in the second chapter, I examine the interaction between productivity-enhancing government spending and credit spreads. In the context of a costly state verification framework, increased borrowing to expand production increases the threshold productivity level below which firms choose to default, and thus, entails higher risk premium. However, when government spending contributes to aggregate production, the threshold level of default and, thus, the probability of default, decrease, leading to a lower risk premium. In the last chapter I address two main questions: how does the economy respond in a crisis experiment when credit frictions originate from both the supply-side and the demand-side of credit markets? How are alternative unconventional credit policies different in their real effects in an environment where both types of credit frictions are present? I show that higher aggregate risk results in increased leverage for both firms and financial intermediaries, leading to an endogenous amplification mechanism which appears much stronger than what predicted by the benchmark financial accelerator framework. Furthermore, I find that, following a severe recession, a credit policy entailing equity injections into the banking system performs better than one involving direct lending to non-financial firms.