Economic Forecast paper Project: Economic Forecast This project will focus on writing about a current event in an economic forecast. Economic forecasting can involve estimating the value of the GDP. Effective planning and policies depend on accurate forecasts.
Louis working papers are preliminary materials circulated to stimulate discussion and critical comment. How- ever, currency in most economies is a uniform object, and there may be incentive compatible allocations that cannot be implemented with a uniform currency. We show that currency reform, ie, changing the monetary base by replacing one currency with another, is a powerful tool that can enable a planner to achieve his desired allocation.
Our monetary mechanism with currency reform is anonymous and features nonlinear pricing of consumption goods and future assets, as observed in practice. Our result suggests that currency reform is rarely seen in practice precisely because it is such a powerful tool and none but the most benevolent planner can be trusted to use it wisely.
Our main results characterize the implications of constrained efficiency for long-run welfare and inequality. Under minimal technical conditions, there is Absolute Immiseration: When types are persistent and utility is unbounded below, there is Relative Immiseration: These results extend and substantially generalize the hallmark findings from the classic literature with iid types, suggesting that the underlying forces are robust to a broad class of private information processes.
The proofs rely on novel recursive techniques and martingale arguments. When the agent has CARA utility, we also analytically and numerically characterize the short-run properties of the optimal contract.
We compare properties of the wedges to their counterparts in the dynamic taxation literature. This paper explores two potential explanations for this decline: First, we establish that declining home values explain only a small portion of the observed reduction in vehicle sales.
Using a county-level panel from the episode, we find: Next, examining state-level data fromwe find: We also detail the sources of the differences between our findings 1 and 2 from existing research. We build a permanent income model augmented to include infrequent, repeated car buying.
Our calibrated model matches the pre-recession distribution of auto vintages and exhibits a large vehicle sales decline in response to a moderate decline in expected permanent income. In response to the decline in permanent income, households delay replacing existing vehicles, allowing them smooth the effects of the income shock without significantly adjusting the service flow from their vehicles.
Combining our negative results regarding housing wealth with our positive model-based findings, we interpret the auto market collapse as consistent with existing permanent income based approaches to durable goods consumption e. Originating banks can screen their borrowers, but can inform investors of their asset type only through an error-prone rating technology.
The premium paid on highly rated assets emerges as the main determinant of screening effort. Because the rating technology is imperfect, this premium is insufficient to induce the efficient level of screening. However, the fact that banks know their asset quality and produce public information accordingly helps keep the premium high.
Mandatory rating and mandatory ratings disclosure policies interfere with this decision margin, thereby reducing informativeness of high ratings, lowering the premium paid on them, and exacerbating the credit misallocation problem.
If, as in Skreta and Veldkampwe associate the expansion leading up to the recent financial crisis with declining rating accuracy, our model helps interpret several puzzling pre-crisis observations: The same model mechanism also helps explain the variation in default rates across asset classes documented in Cornaggia, Cornaggia, and Hund We build a search-based neoclassical model to qualitatively and quantitatively explain these stylized facts.
This suggests that something other than sequential service is needed to help explain runs. We show that in the absence of sequential service runs can easily occur whenever bank-funded in- vestments are subject to increasing returns to scale consistent with available evidence.
Our framework is used to understand and evalu- ate recent banking and money market regulations. I set up a multi-industry general equilibrium model of international trade with heterogeneous fi rms subject to fi nancial frictions. Industries differ in capital-intensity, which leads to differences in external fi nance dependence.
The model is parameterized to match key features of fi rm-level data.Bank runs without sequential service by David Andolfatto and Ed Nosal Working Paper A updated July Insights & Research > Publications > US Economic Outlook U.S.
Economic Outlook Read about the current and likely future economic conditions and forecasts of selected economic . Project: Economic Forecast. This project will focus on writing about a current event in an economic forecast. Economic forecasting can involve estimating the value of the GDP.
Autumn Economic Forecast: sustained but less dynamic growth amid high uncertainty Growth in the euro area is forecast to ease from a year high of % in to % in before moderating further to % in and % in Data and research on economic outlooks, analysis and forecasts, including economic projections, economic outlooks, economic surveys, OECD forecasts during and after the financial crisis., United Kingdom - Economic forecast summary.
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