Event

Past Events

CARF Workshops (2005.07-12)

Fiscal Divergence and Business Cycle Synchronization: Irresponsibility is Idiosyncratic (joint with Zsolt Darvas and Gyorgy Szapary)

Dates 2005/12/15(Thu)16:50-18:30
Venue Lecture Hall No.3, 3rd floor of the main Economics Building
Speaker Andrew K. Rose (Haas School of Business, University of California, Berkeley)
Co-Sponsor Macroworkshop
Abstract Using a panel of21 OECD countries and 40 years of annual data, we find that countries with similar government budget positions tend to have business cycles that fluctuate more closely. That is, fiscal convergence (in the form of persistently similar ratios of government surplus/deficit to GDP) is systematically associated with more synchronized business cycles. We also find evidence that reduced fiscal deficits increase business cycle synchronization. The Maastricht” convergence criteria,” used to determine eligibility for EMU, encouraged fiscal convergence and deficit reduction. They may thus have indirectly moved Europe closer to an optimum currency area, by reducing countries’ abilities to create idiosyncratic fiscal shocks. Our empirical results are economically and statistically significant, and robust.
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Global Capital Flows and National Policy Choices (joint with Irina Tytell)

Dates 2005/12/7(Wed)12:00-13:10
Venue Conference Room No.1 on the 12th floor of the main Economics Building
Speaker Shang-Jin Wei  (International Monetary Fund)
Co-Sponsor Macroworkshop
Abstract This paper studies whether changes in global financial environment have induced governments to pursue better policies (the “discipline effect’’).The evidence indicates that financial globalization has induced countries to pursue lower inflation rates, but not succeeded in lowering budget deficits. So the strength of the discipline effect various across different public policies.
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Critical Evaluation of Hayashi-Prescott Hypothesis on Japan's Lost Decade

Dates 2005/11/21(Mon)12:00-13:00
Venue Conference Room No.1, 12th floor of the main Economics Building
Speaker Hiroyuki Ono (Toyo University)
Co-Sponsor Macroworkshop

A Portfolio Theory of International Capital Flows (joint with Mick Devereux)

Dates 2005/11/10(Thu)16:50-18:30
Venue Lecture Hall No.3, 3rd floor of the main Economics Building
Speaker Makoto Saito (Hitotsubashi University)
Co-Sponsor Macroworkshop
Abstract This paper constructs a model in which the currency composition of national portfolios is an essential element in facilitating capital flows between countries. In a two country environment, each country chooses optimal nominal bond portfolios in face of real and nominal risk. Current account deficits are financed by increases in domestic currency debt, but balanced by increases in foreign currency credit. This is combined with an evolution of risk-premiums such that the rate of return on the debtor country’s gross liabilities is lower than the return on its gross assets. This ensures stability of the world wealth distribution.
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Renegotiation and Relational Contracting

Dates 2005/10/25(Tue)16:50-18:30
Venue Lecture Hall No.3, 3rd floor of the main Economics Building
Speaker Ricard Gil  (University of California, Santa Cruz)
Co-Sponsor Microworkshop
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Sequential Costly State Verifications under Two-State Markov Chain Shocks

Dates 2005/10/13(Thu)16:50-18:30
Venue Lecture Hall No.3, 3rd floor of the main Economics Building
Speaker Hisashi Nakamura (University of Tokyo)
Co-Sponsor Macroworkshop
Abstract This paper studies sequential costly state verification as a formal representation of loan-default negotiation in an infinite horizon principal-agent model with privately observed two-state Markov income shocks. The main result is as follows: With some particular parametric assumptions, there exists a trade equilibrium where costly state verifications occur recurrently only when lender believes that high state is probable while borrower knows that the true state is low. In the trade equilibrium, default plays a positive role in ex ante contingent agreement. Also, as an application to international finance, this paper gives some insights into autarkic-financing features in the world’s poorest economies.
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The Zero Bound and the Term Structure of Interest Rates in a Nonlinear Macroeconomic Model

Dates 2005/9/26(Mon)12:00-13:15
Venue Conference Room No.1, 12th floor of the main Economics Building
Speaker Alexander Wolman (Richmond Federal Reserve Bank)
Co-Sponsor Macroworkshop

Asset Prices and Liquidity in an Exchange Economy

Dates 2005/7/14(Thu)16:50-18:30
Venue Lecture Hall No.3, 3rd floor of the main Economics Building
Speaker Ricardo Lagos (New York University)
Co-Sponsor Macroworkshop
Abstract I develop an asset-pricing model in which financial assets are valued for their liquidity-the extent to which they are useful in facilitating exchange-as well as for being claims to streams of consumption goods. The implications for average asset returns, the equitypremium puzzle, and the risk-free rate puzzle, are explored both analytically and quantitatively in a version of the model that nests Mehra and Prescott (1985).
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Search Theory in Monetary Economics II

Dates 2005/7/12(Tue)12:00-13:15
Venue Conference Room No.1, 12th floor of the main Economics Building
Speaker Ricardo Lagos (New York University)
Co-Sponsor Macroworkshop

Search Theory in Monetary Economics I

Dates 2005/7/11(Mon)12:00-13:15
Venue Conference Room No.1, 12th floor of the main Economics Building
Speaker Ricardo Lagos (New York University)
Co-Sponsor Macroworkshop

Adjusting to Capital Liberalization (joint with K. Aoki and G. Benigno, LSE)

Dates 2005/7/7(Thu)16:50-18:30
Venue Lecture Hall No.3, 3rd floor of the main Economics Building
Speaker Nobuhiro Kiyotaki (LSE)
Co-Sponsor Macroworkshop