Carlos De Resende - Latest
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Alternative Optimized Monetary Policy Rules in Multi-Sector Small Open Economies: The Role of Real Rigidities
Inflation-targeting central banks around the world often state their inflation objectives with regard to the consumer price index (CPI). Yet the literature on optimal monetary policy based on models with nominal rigidities and more than one sector suggests that CPI inflation is not always the best choice from a social welfare perspective. -
How Changes in Oil Prices Affect the Macroeconomy
We estimate a New Keynesian general-equilibrium open economy model to examine how changes in oil prices affect the macroeconomy. Our model allows oil price changes to be transmitted through temporary demand and supply channels (affecting the output gap), as well as through persistent supply side effects (affecting trend growth). -
Globalization and Inflation: The Role of China
In this paper, we develop a theoretical model which identifies four channels–import prices, competition with domestic suppliers and workers, and commodity prices–through which price- and wage-setting conditions in country j may affect inflation in country i. -
The Welfare Implications of Fiscal Dominance
This paper studies the interdependence between fiscal and monetary policy in a DSGE model with sticky prices and non-zero trend inflation. We characterize the fiscal and monetary policies by a rule whereby a given fraction k of the government debt must be backed by the discounted value of current and future primary surpluses. -
Cross-Country Estimates of the Degree of Fiscal Dominance and Central Bank Independence
This paper studies the interdependence between fiscal and monetary policies, and their joint role in the determination of the price level. -
IMF-Supported Adjustment Programs: Welfare Implications and the Catalytic Effect
The author studies the welfare implications of adjustment programs supported by the International Monetary Fund (IMF). He uses a model where an endogenous borrowing constraint, set up by international lenders who will never lend more than a debt ceiling, forces the borrowing economy to always choose repayment over default. -
Endogenous Borrowing Constraints and Consumption Volatility in a Small Open Economy
Consumption volatility relative to output volatility is consistently higher in emerging economies than in developed economies.