integrated value assessment using paired comparisons abstract a survey methodology is described which uses paired comparisons in combination with contingent valuation to assess individuals values concerning the conservation of a rare mammal species the mountain pygmy possum burramys parvus value expressions which can be accommodated by economic theory are distinguished from those which are best represented by a noncompensatory preference structure a procedure for aggregating data involving these two categories of value expression is described this integrated value assessment is more inclusive than the conventional approach of using contingent valuation and other economic data within a benefit cost framework a comprehensive assessment of the value implications of a proposal can be undertaken in which the actual rather than assumed structures of individuals values are taken into account

bank risk taking securitization supervision and low interest rates evidence from the euro area and the u s lending standards using a unique dataset of the euro area and the u s bank lending standards we find that low monetary policy short term interest rates soften standards for household and corporate loans this softening especially for mortgages is amplified by securitization activity weak supervision for bank capital and low monetary policy rates for an extended period conversely low long term interest rates do not soften lending standards finally countries with softer lending standards before the crisis related to negative taylor rule residuals experienced a worse economic performance afterward these results help shed light on the origins of the crisis and have important policy implications the author 2011 published by oxford university press on behalf of the society for financial studies all rights reserved for permissions please e mail journals permissions oup com oxford university press

why does the economy fall to pieces after a financial crisis the worst fi nancial crisis in the history of the united states and many other he worst fi nancial crisis in the history of the united states and many other countries started in 1929 the great depression followed the second worst countries started in 1929 the great depression followed the second worst struck in the fall of 2008 and the great recession followed commentators struck in the fall of 2008 and the great recession followed commentators have dwelt endlessly on the causes of these and other deep fi nancial collapses have dwelt endlessly on the causes of these and other deep fi nancial collapses less conspicuous has been the macroeconomists concern about why output and less conspicuous has been the macroeconomists concern about why output and employment collapse after a fi nancial crisis and remain at low levels for several or employment collapse after a fi nancial crisis and remain at low levels for several or many years after the crisis this article pursues modern answers to that question it many years after the crisis this article pursues modern answers to that question it focuses on events in the united states since 2008 focuses on events in the united states since 2008 existing macroeconomic models account successfully for the immediate effects existing macroeconomic models account successfully for the immediate effects of a fi nancial crisis on output and employment i will lay out a simple macro model of a fi nancial crisis on output and employment i will lay out a simple macro model that captures the most important features of modern models and show that realistic that captures the most important features of modern models and show that realistic increases in fi nancial frictions that occurred in the crisis of late 2008 will generate increases in fi nancial frictions that occurred in the crisis of late 2008 will generate declines in real gdp and employment of the magnitude that occurred but this declines in real gdp and employment of the magnitude that occurred but this model cannot explain why gdp and employment failed to recover once the fi nancial model cannot explain why gdp and employment failed to recover once the fi nancial crisis subsided the model implies a recovery as soon as fi nancial frictions return to crisis subsided the model implies a recovery as soon as fi nancial frictions return to normal at the end of the article i will mention the ideas that are in play to explain normal at the end of the article i will mention the ideas that are in play to explain the persistent adverse effects of temporary crises but these ideas have not made their the persistent adverse effects of temporary crises but these ideas have not made their way into the mainstream model way into the mainstream model this article cites only a few of the many important contributions to the mainthis article cites only a few of the many important contributions to the mainstream model my paper hall 2009 contains many citations and the forthcoming stream model my paper hall 2009 contains many citations and the forthcoming new volume of the new volume of the handbook of monetary economics discusses the literature fully discusses the literature fully

international credit supply shocks abstract house prices and exchange rates can potentially amplify the expansionary effect of capital inflows we first set up a model of collateralized borrowing in domestic and foreign currency with international financial intermediation in which a change in leverage of global intermediaries leads to an international credit supply increase in this environment we illustrate how house price increases and exchange rates appreciations contribute to fueling the boom by inflating the value of collateral we then document empirically in a panel var model for 50 advanced and emerging countries estimated with quarterly data from 1985 to 2012 that an increase in the leverage of us broker dealers also leads to an increase in cross border credit flows a house price and consumption boom a real exchange rate appreciation and a current account deterioration consistent with the transmission in the model finally we study the sensitivity of the consumption and asset price response to such a shock and show that country differences are associated with the level of the maximum loan to value ratio and the share of foreign currency denominated credit

new keynesian models durable goods and collateral constraints abstract econometric evidence suggests that in response to monetary policy shocks durable and non durable spending co move positively and durable spending exhibits a much larger sensitivity to the shocks a standard two sector new keynesian model with perfect financial markets is at odds with these facts the introduction of a borrowing constraint where durables play the role of collateral assets helps in reconciling the model with the empirical evidence

debt deleveraging and the liquidity trap a fisher minsky koo approach in this paper we present a simple new keynesian style model of debt driven slumps that is situations in which an overhang of debt on the part of some agents who are forced into rapid deleveraging is depressing aggregate demand making some agents debt constrained is a surprisingly powerful assumption fisherian debt deflation the possibility of a liquidity trap the paradox of thrift a keynesiantype multiplier and a rationale for expansionary fiscal policy all emerge naturally from the model we argue that this approach sheds considerable light both on current economic difficulties and on historical episodes including japan s lost decade now in its 18th year and the great depression itself

house price booms current account deficits and low interest rates one of the most striking features of the period before the great recession is the strong positive correlation between house price appreciation and current account defi cits not only in the united states but also in other countries that have subsequently experienced the highest degree of fi nancial turmoil a progressive relaxation of credit standards can rationalize this empirical observation lower collateral requirements facilitate access to external funding and drive up house prices the current account turns negative because households borrow from the rest of the world at the same time however the world real interest rate counterfactually increases the two key ingredients that reconcile a demand based explanation of house price booms and current account defi cits with the evidence on real interest rates are nominal interest rates lower than the predictions of a standard monetary policy rule in leveraged economies and foreign exchange rate pegs in saving countries

house prices home equity based borrowing and the u s household leverage crisis us household leverage sharply increased in the years preceding the 2007 eco nomic recession the top panel of figure 1 shows the steady rise in household debt since 1975 which accelerated beginning in 2002 in just five years the household sector doubled its debt balance in comparison the contemporaneous increase in corporate debt was modest the middle panel shows that the increase in household debt from 2002 to 2007 translated into a striking rise in household leverage as mea sured by the debt to income ratio during the same time period corporate leverage declined the dramatic absolute and relative rise in us household leverage from 2002 to 2007 is unprecedented compared to the last 25 years one reason for the rapid expansion in household leverage during this period is that mortgage credit became more easily available to new home buyers mian and sufi 2009 strong house price appreciation from 2002 to 2006 however which may have been fueled by the availability of mortgage credit to a riskier set of new home buyers could also have had an important feedback effect on household lever age through existing homeowners given that 65 percent of us households already owned their primary residence before the acceleration in house prices the feedback from house prices to borrowing may be an important source of the rapid rise in household leverage that preceded the economic downturn our central goals in this study are to estimate how homeowner borrowing responded to the increase in house prices and to identify which homeowners responded most aggressively we examine this home equity based borrowing channel using a dataset consisting of anonymous individual credit files of a national consumer credit bureau agency we follow a random sample of over 74 000 us homeowners who owned their homes as of 1997 at an annual frequency from the end of 1997 until the end of 2008 the bottom panel of figure 1 plots the growth in debt of 1997 homeowners over time and shows that existing homeowners borrow significantly more debt as their house prices appreciate from 2002 to 2006 while the aggregate trend is suggestive

valuation and management of wetland ecosystems we recently completed a study of wetland values in coastal louisiana that employed both willingness to pay and energy analysis based methodologies and were able to bracket a range of values within which we feel fairly confident the true value lies however a large amount of uncertainty remains our current estimates of the total prsent value of an average acre of natural wetlands in louisiana are us 2429 6400 per acre assuming an 8 discount rate to 8977 17000 per acre assuming a 3 discount rate at the lowest value the current annual rate of loss of louisiana wetlands 50 sq miles per year is worth about 77 million at the largest value it is worth about 544 million in this paper we a discuss the fundamental theoretical and practical problems underlying natural resources valuation b summarize our methods and findings for louisiana wetlands and c elaborate on some of the more recalcitrant problems attending applied natural resource valuation including discounting and dealing with uncertainty and imprecision the discount rate makes more difference in the final result than any other one factor and yet there is much disagreement about the appropriate approach to discounting natural resources we discuss the discounting problem as applied to natural resources and argue for lower discount rates for valuing renewable natural resources than apply for other aspects of the economy it now seems clear that no reasonable amount of effort will produce very precise estimates of wetland values and we suspect this is also the case for several other classes of natural resources we elaborate a wetlands asurance bonding system to address these problems

sovereign debt crisis in a monetary union accounting for excessive debt housing bubbles and the transmission of crises despite vast empirical documentation of the recent sovereign debt crisis in southern europe there is little research accounting for the following stylized facts in a single coherent framework continuous borrowing high growth housing bubbles and current account deficits since the beginning of the european monetary union ending with a sudden crisis and subsequent contagion of crisis we fill this gap by proposing a model and fitting it to the data using a growth model with collateral constraints of small peripheral economies in the institution of a monetary union we analyze the multilayer moral hazards underlying excessive borrowing since housing bubbles can support a constant loan to value ltv ratio lower than ltv limits peripheral economies can lock into a steady state ponzi growth equilibrium with high growth and current account deficits but these economies become vulnerable to crises we identify the self fulfilling crisis region sfcr in which the economy grows fast with a seemingly safe ltv ratio but with a vulnerability to crises moreover a crisis in one sector propagates to other sectors by endogenously expanding their sfcrs we derive some policy implications on ltv regulations and market psychology finally our calibration exercise presents how bubbles develop and burst along with contagion across sectors accounting for the data jel e44 f34 o16

financial innovation the discovery of risk and the u s credit crisis abstract financial innovation and overconfidence about the risk of new financial products were key factors behind the 2008 u s credit crisis we show that a model with a collateral constraint in which learning about the risk of a new financial environment interacts with fisherian amplification produces a boom bust cycle in debt asset prices and consumption early realizations of a high borrowing ability regime turn agents optimistic about the persistence probability of this regime conversely the first realization of a low borrowing ability regime turns agents unduly pessimistic the model predicts large increases in household debt land prices and excess returns during 1998 2006 followed by a collapse

measuring the existence value of wildlife reply we know little about the motives underlying individual responses to contingent valuation cv questions concerning the existence of wildlife yet motives are important because they determine how the resulting value estimates should be interpreted and used in making management decisions for example zero bids are very common in cv but these are often protests that do not represent zero valuation for the resource itself protest zero bids may be particularly prevalent in wildlife existence value studies because some people may view trade offs between money and wildlife as unethical or immoral if protest zero bids are not interpreted correctly existence value estimates obviously will be biased the motives underlying positive cv bids also matter unfortunately these motives have received much less research attention and so may be more controversial our study of wildlife values in new england suggests that many respondents who gave positive bids were motivated by ethical concerns altruism or the desire to do their fair share concerns that indicate they used decision making processes inconsistent with the neoclassical paradigm stevens et al 1991 cv results may therefore fail to measure the economic value of existence in traditional terms the bergson tintner samuelson formulation presented by kohn 1993 is useful in this context because it attempts to disentangle behavior motivated by ethical concerns about existence from preferences about wildlife use each individual is assumed to wear two hats one as citizen the other as consumer from this perspective citizens express social values which may be ethically driven while economic values are expressed by consumers kohn suggests that we make use of this distinction by first asking respondents as citizens to make implicit trade offs between income and the preservation of wildlife respondents are then asked about their willingness to pay for the option of consuming wildlife while this is an interesting proposal the bergson tintner samuelson framework is only one of several alternative theories about behavior involving ethical considerations for discussion these theories can be classified into three groups a theories of social or group interest b natural rights and c theories based upon the neoclassical model of self interest social interest theories include the bergson tintner samuelson formulation outlined by kohn and the dual utilities model proposed by margolis 1982 margolis suggests that people are motivated by two basic concerns a self interest and b social or group interest social interest which pertains to the welfare of society as a whole is assumed to be governed in part by ethics moral duty and commitment expressions of social interest include charity participation in the political process voting and contributions for the provision of public goods margolis maintains that the neoclassical theory of self interest generally fails to adequately explain individual behavior about social interests and he proposes a dual utilities model of individual preferences in which people have irreducibly distinct social and private preferences unlike the framework proposed by kohn there is no grand maximum where social value is traded off against private value rather individuals are assumed to allocate income between social and private preferences so as to do their fair share for the welfare of society as a whole con

hierarchical choice in economics abstract the paper examines the relevance for economic issues of choice which is not characterized by unlimited substitutability after showing that hierarchical choice is common in other social sciences like psychology the paper proceeds with an examination of such choice and of its different categories subsequently the implications for hierarchical choice for specific economic issues are analysed in particular there is discussion and literature review of demand theory engel curves the theory of the firm and social choice theory finally some suggestions for the application to other economic problems are considered

capital inflows and the u s housing boom we estimate an open economy vector autoregressive var model to study the effect of capital inflow shocks on the u s housing market we look at different external shocks that generate capital inflows to the u s in particular saving glut shocks and foreign monetary policy expansions the shocks are identified with theoretically robust sign restrictions derived from an open economy dynamic stochastic general equilibrium dsge model our findings suggest that capital inflows that result from saving glut shocks have a positive and persistent effect on real house prices and real residential investment

house prices borrowing constraints and monetary policy in the business cycle i develop a general equilibrium model with sticky prices credit constraints nominal loans and asset prices changes in asset prices modify agents borrowing capacity through collateral value changes in nominal prices affect real repayments through debt deflation monetary policy shocks move asset and nominal prices in the same direction and are amplified and propagated over time the financial accelerator is not constant across shocks nominal debt stabilises supply shocks making the economy less volatile when the central bank controls the interest rate i discuss the role of equity debt indexation and household and firm leverage in the propagation mechanism finally i find that monetary policy should not target asset prices as a means of reducing output and inflation volatility

the value of biodiversity markets society and ecosystems the value of biodiversity is discussed at different levels including market value non market values to humans and the value of biodi versity to ecosystems the main conclusion is that although market exchange values of environmental services may be used to justify biodiversity protec tion measures it must be stressed that exchange value constitutes a small portion of total biodiver sity value the total value of existing biodiversity is largely unknown but indications are that it is essen tial to human existence the various levels of biodi versity value point to the need for a hierarchical and pluralistic methodology to determine appropri ate policies for its preservation jel q21 i introduction among ecologists there is a general con sensus that biodiversity1 is of critical impor tance to the health of ecosystems and even for the long term survival of the human species there is also a consensus that bio diversity is being lost at a rate which is a cause for concern 2 economists on the other hand generally view biodiversity as just an other good which is to be placed in the basket of market choices just as any other the discussion of the specifics of biodiver sity policy has been unsatisfactory partly because of the different meanings of the word value used by economists and ecolo gists many ecologists fail to understand the logic of market allocation and why biologi cal resources are used in seemingly irra tional ways many economists fail to ap preciate the narrowness of the concept of economic value as indicated by relative prices determined by market exchange fol lowing anderson 1966 and brown 1984 the discussion below considers economic measures of value to be species of the genus assigned value which belongs to the family value many biologists and paleontologists be lieve that we are at a critical point in the history of the human species and perhaps even in the 600 million year history of com plex multicelled life on earth if the paleon tologists and biologists who study the phe nomenon of mass extinction are correct the current human induced mass extinction may be of the same order of magnitude as the five other major extinction episodes which destroyed between 20 and 96 percent of existing species on the planet ehrlich and ehrlich 1992 ward 1994 wilson 1992 we are living in a truly remarkable period in earth s 41 billion year history the valua tion decisions our species has made in the recent past and will make during the next few decades will determine the fate of life on earth for the next tens of millions of years it is critical to clarify the language and concepts we use to estimate the value of biodiversity and thus policies leading to its destruction or preservation the importance attached to the issue of biodiversity preservation necessarily in volves ethical judgments about duty to fu ture generations and responsibility toward the nonhuman natural world although in dividuals hold a variety of conflicting beliefs about human responsibility to the natural world this does not mean that policy choices

should central banks respond to movements in asset prices in recent decades asset booms and busts have been important factors in macroeconomic fluctuations in both industrial and developing countries in light of this experience how if at all should central bankers respond to asset price volatility we have addressed this issue in previous work bernanke and gertler 1999 the context of our earlier study was the relatively new but increasingly popular monetary policy framework known as inflation targeting see e g bernanke and frederic mishkin 1997 in an inflation targeting framework publicly announced medium term inflation targets provide a nominal anchor for monetary policy while allowing the central bank some flexibility to help stabilize the real economy in the short run the inflation targeting approach gives a specific answer to the question of how central bankers should respond to asset prices changes in asset prices should affect monetary policy only to the extent that they affect the central bank s forecast of inflation to a first approximation once the predictive content of asset prices for inflation has been accounted for there should be no additional response of monetary policy to assetprice fluctuations in use now for about a decade inflationtargeting has generally performed well in practice however so far this approach has not often been stress tested by large swings in asset prices our earlier research employed simulations of a small calibrated macroeconomic model to examine how an inflation targeting policy defined as one in which the central bank s instrument interest rate responds primarily to changes in expected inflation might fare in the face of a boom and bust cycle in asset prices we found that an aggressive inflationtargeting policy rule in our simulations one in which the coefficient relating the instrument interest rate to expected inflation is 2 0 substantially stabilizes both output and inflation in scenarios in which a bubble in stock prices develops and then collapses as well as in scenarios in which technology shocks drive stock prices intuitively inflation targeting central banks automatically accommodate productivity gains that lift stock prices while offsetting purely speculative increases or decreases in stock values whose primary effects are through aggregate demand conditional on a strong policy response to expected inflation we found little if any additional gains from allowing an independent response of central bank policy to the level of asset prices in our view there are good reasons outside of our formal model to worry about attempts by central banks to influence asset prices including the fact that as history has shown the effects of such attempts on market psychology are dangerously unpredictable hence we concluded that inflationtargeting central banks need not respond to asset prices except insofar as they affect the inflation forecast in the spirit of recent work on robust control the exercises in our earlier paper analyzed the performance of policy rules in worst case discussants robert shiller yale university glenn rudebusch federal reserve bank of san francisco kenneth rogoff harvard university

five facts about prices a reevaluation of menu cost models are price decreases 3 the frequency of price increases covaries strongly with inflation whereas the frequency of price decreases and the size of price increases and price decreases do not 4 the frequency of price change is highly seasonal it is highest in the first quarter and then declines 5 we find no evidence of upwardsloping hazard functions of price changes for individual products we show that the first second and third facts are consistent with a benchmark menu cost model whereas the fourth and fifth facts are not

credit crises precautionary savings and the liquidity trap we use a model a la bewly huggett ayagari to explore the eects of a credit crunch on consumer spending households borrow and lend to smooth idiosyncratic income shocks facing an exogenous borrowing constraint we look at the economy response after an unexpected permananent tightening of this constraint the interest rate drops sharply in the short run and then adjusts to a lower steady state level this is due to the fact that after the shock a large fraction of agents is far below their target holdings of precautionary savings and this generates a large temporary positive shock to net lending we then look at the eects on output here two opposing forces are present as households can deleverage in two ways by consuming less and by working more we show that under a reasonable parametrization the eect on consumer spending dominates and precautionary behavior generates a recession if we add nominal rigidities two things happen i supply side responses are muted and ii there is a lower bound on the interest rate adjustment these two elements tend to amplify the recession caused by the credit tightening

a structural decomposition of the u s trade balance productivity demographics and fiscal policy abstract the us external deficits have been the most striking manifestation of global imbalances this paper investigates the contribution of productivity growth demographics and fiscal policy in accounting for the evolution of the us external imbalances against industrialized countries during the last three decades productivity growth plays a dominant role demographics explain a non negligible and nearly permanent component of the us trade deficit furthermore the international demographic transition is crucial for large us external imbalances to be consistent with the persistent decline of world real interest rates observed in the data fiscal policy is of minor importance

conference on housing stability and the macroeconomy international perspectives this article provides an introduction to the jmcb special issue on housing bubbles the global financial crisis and the ensuing recessions in countries that experienced housing busts we focus on five themes that are important for policymakers and researchers alike the domestic and international factors driving housing booms and busts the relevance of the housing sector for the real economy how monetary policy should react to housing booms and busts how housing and mortgage finance reform could affect financial stability and the broad lessons learned for macroeconomics and macroprudential policy

collateral constraints and the current account theory and evidence we investigate the impact of domestic financial frictions on the current account dynamics in asian countries before and after the asian financial crisis in 1997 1998 by introducing collateral constraints into the intertemporal current account approach we examine six asian countries before the crisis collateral constraints significantly impact the current account in korea malaysia the philippines and thailand but after the crisis they do not our study shows that the impact of domestic financial frictions on the current account changes before and after a financial crisis jel f32 f41

macroeconomic modeling for monetary policy evaluation we describe some of the main features of the recent vintage macroeconomic models used for monetary policy evaluation we point to some of the key differences with respect to the earlier generation of macro models and highlight the insights for policy that these new frameworks have to offer our discussion emphasizes two key aspects of the new models the significant role of expectations of future policy actions in the monetary transmission mechanism and the importance for the central bank of tracking of the flexible price equilibrium values of the natural levels of output and the real interest rate we argue that both features have important implications for the conduct of monetary policy

the dynamic connectedness of uk regional property returns in this study we examine the network topology of uk regional property returns over the period 1973q4 2014q4 using a dynamic measure of connectedness developed by diebold and yilmaz 2014 overall

ecosystems contingent valuation and ethics the case of wetland re creation this paper addresses a current issue in environmental valuation namely the extent to which environmental preferences depart from the usual economic paradigm to incorporate some lexicographic elements after a theoretical discussion the paper reviews attempts to explore this question empirically by supplementing contingent valuation analyses with an exploration of the motives behind willingness to pay responses including zero bids and refusals to answer this is followed by the presentation of new evidence investigating respondents willingness to pay for the creation of a wetland taken from 713 personal interviews of the british public 2000 elsevier science b v all rights reserved

credit constraints and growth in a global economy we show that in an open economy olg model the interaction between growth differentials and household credit constraints more severe in fast growing countries can explain three prominent global trends a divergence in private saving rates between advanced and emerging economies large net capital outflows from the latter and a sustained decline in the world interest rate micro level evidence on the evolution of age saving profiles in the u s and china corroborates our mechanism quantitatively our model explains about 40 percent of the divergence in aggregate saving rates and a significant portion of the variations in age saving profiles across countries and over time

integrated value theory for natural areas abstract value assessment is a necessary component of any rational decision making process concerning the use or management of natural areas this paper describes an integrated value theory for identifying measuring and aggregating human values for natural areas to ensure philosophical coherence the framework makes a commitment to a specific theory of end values three related levels of end value are identified which give meaning to the values expressed by humans the theory addresses the three rational modes of human value expression weakly comparable noncompensatory and exchange exchange value expressions are consistent with neoclassical economic notions of value the other types of value expression are not current techniques for aggregating values include multicriteria analysis and benefit cost analysis multicriteria analysis can encompass the three modes of value expression but does not readily discriminate between them and so fails to take advantage of the full information content of noncompensatory and exchange preferences benefit cost analysis on the other hand assumes a particular structure of values which means it should be limited to assessment of exchange preferences the framework outlined in this paper provides an advance on both of these methods in that it combines the specificity of benefit cost analysis with the breadth of multicriteria analysis

impact of state and civil institutions on the operation of rural market and nonmarket configurations abstract the approach undertaken in this study is based on the concept of configurations configurations are shaped by specific combinations of characteristics of the following elements the item transacted the actors and the underlying physical technological cultural and policy environment configurations can be either market or nonmarket configurations in turn transactions are endogenously determined within given configurations the impact of government intervention on the performance of a number of prototypical rural configurations and agrarian institutions such as the food and cash crops market configurations the farm household sharecropping and the rural official and unofficial credit markets is evaluated critically

house prices capital inflows and macroprudential policy this paper evaluates the monetary and macroprudential policies that mitigate the procyclicality arising from the interlinkages between current account deficits and financial vulnerabilities we develop a two country dynamic stochastic general equilibrium dsge model with heterogeneous households and collateralised debt the model predicts that external shocks are important in driving current account deficits that are coupled with run ups in house prices and household debt in this context optimal policy features an interest rate response to credit and a ltv ratio that countercyclically responds to house price dynamics by allowing an interest rate response to changes in financial variables the monetary policy authority improves social welfare because of the large welfare gains accrued to the savers the additional use of a countercyclical ltv ratio that responds to house prices increases the ability of borrowers to smooth consumption over the cycle and is pareto improving domestic and foreign shocks account for a similar fraction of the welfare gains delivered by such a policy

asset prices exchange rates and the current account this paper analyses the role of asset prices in comparison to other factors in particular exchange rates as a driver of the us trade balance it employs a bayesian structural var model that requires imposing only a minimum of economically meaningful sign restrictions we find that equity market shocks and housing price shocks have been major determinants of the us current account in the past accounting for up to 30 of the movements of the us trade balance at a horizon of 20 quarters by contrast shocks to the real exchange rate have been less relevant explaining about 9 and exerting a more temporary effect on the us trade balance our findings suggest that large exchange rate movements may not necessarily be the key element of an adjustment of today s large current account imbalances and that in particular relative global asset price changes could be a potent source of adjustment

monetary policy and large crises in a financial accelerator agent based model abstract an accommodating monetary policy followed by a sudden increase of the short term interest rate often leads to a bubble burst and to an economic slowdown through the implementation of an agent based model with a financial accelerator mechanism we are able to study the relationship between monetary policy and large scale crisis events a two step computational approach is proposed which performs i a pattern search of double dip episodes and ii counter factual simulations implementing unconventional monetary policy the main results can be summarized as follow a sudden and sharp increases of the policy rate can generate recessions b after a crisis returning too soon and too quickly to a normal monetary policy regime can generate a double dip recession while c keeping the short term interest rate anchored to the zero lower bound in the short run can successfully avoid a further slowdown

capital regulation and monetary policy with fragile banks optimizing banks subject to runs are introduced in a macro model to study the transmission of monetary policy and its interplay with bank capital regulation when banks are risky a monetary expansion and a positive productivity shock increase bank leverage and risk risk based capital requirements amplify the cycle and are welfare detrimental within a class of simple policy rules the best combination includes mildly anticyclical capital ratios as in basel iii and a response of monetary policy to asset prices or bank leverage

measuring the existence value of wildlife what do cvm estimates really show two research programs are brought together to contribute to the growing body of work on alternatives to standard welfare based approaches to environmental valuation and policy the first is the theoretical literature undermining the new welfare