Monetary and fiscal policy interactions with bounded rationality / World Trade Stagnation

Lun, 20/09/2021 - 13:00 / 14:00

405, Viale Romania

Speaker: Marialaura Seccareccia, Marco D'Amico , Luiss

 

"Monetary and fiscal policy interactions with bounded rationality"

Author: Marialaura Seccareccia, Luiss

Abstract

This paper studies the interaction between fiscal and unconventional monetary (namely QE) policies, in a context in which the short term interest rate is at the ZLB and expectations are non-rational.
During financial crisis conflicts have emerged between the Treasury and the Central Banks in "debt management operations", challenging the achievement of a common set of objectives.(Greenwood et al., 2015).
Fiscal and monetary dominant regimes are analyzed to study the existence and uniqueness of equilibria.

 

"World Trade Stagnation"

Author: Marco D'Amico, Luiss

Abstract

This paper studies the world trade stagnation that originated from the global financial crisis. Consistent with the evidence of increased trade flows between advanced and emerging economies and technology catch up over the same period, I build an expanding variety (Romer, 1990) two-country model with firms heterogeneous à la Melitz (2003) and R&D spillovers. It is found that the proximity to the frontier’s growth rate has medium-run effects on the dynamics of trade while a constant trade share represents the normal state of affairs in the very long-run (BGP). Once the model is fed with estimated TFP forecast errors, it produces a trade share highly correlated (0.86) with the true one over the period 1998-2019.