Optimal sterilization policies in interdependent economies

Optimal Sterilization Policies in Interdependent Economies

Knowledge spillovers in interdependent economies

In this paper, we improve upon Coe and Helpman’s model of international R&D spillovers, using seemingly unrelated regression (SUR) to include interdependence among national economies and allow for variations in coefficients across countries. We find that the impact of knowledge spillovers on national productivity is context dependent: positive in some cases while negative in others. From our in...

Harnessing windfall revenues: optimal policies for resource-rich developing economies

A windfall of natural resource revenue (or foreign aid) faces government with choices of how to manage public debt, investment, and the distribution of funds for consumption, particularly if the windfall is both anticipated and temporary. We show that the permanent income hypothesis prescription of an ever-lasting increase in consumption financed by borrowing ahead of the windfall and then accu...

Overview of SME Policies in Selective Economies

It is now commonly agreed that a healthy industrial structure requires enterprises of all sizes play complementary roles in an economy, SMEs as well as their larger counterparts (Marshall, 1890). Much attention has been paid to the development of SME sector as well as the corresponding policies. A number of experts were invited to contribute to the PECC project, "The Policy Environment for the ...

Optimal Monetary and Exchange Rate Policies in Crisis-Prone Small Open Economies

Banking crises are fairly ubiquitous events with large adverse consequences. This paper studies the potential for banking crises and their effects on exchange rate policies in a microfounded general equilibrium dynamic model in the tradition of Diamond and Dybvig (1983) and Chang and Velasco (2000). More specifically, we produce a small open economy pure exchange overlapping generations model w...