Our major conclusions are as follows: (1) If inflation rates remain high, then the yield curve will tend to slope upward more steeply than in the past (or slope downward less steeply when the yield curve is inverted). (2) This yield curve situation will lead firms to shorten the average maturities of their liabilities, even though this will expose them to greater risks of earnings fluctuations ...

The paper extends the literature on financial development, inflation, and growth by using the idea that both the rates of return on physical and human capital affect growth. This leads to the introduction of the investment rate into the model, as a proxy for the return to physical capital, along with the inflation rate as a variable affecting the return to human capital. As a result financial d...

We develop a model with money and credit where agents have different productivity to study credit and allocation. We show the link between the credit rationing, productivity and monetary policy, and study the distributional effects of monetary policy on the credit constraints, money holdings, and the ability to trade across agents. An agent’s productivity reflects his ability to replenish the m...

We analyze the effect of the fiscal structure upon the trade-off between inflation and output stabilization in presence of technological shocks and deficit or debt objectives in a DGE model with nominal inertia. The model is calibrated to reproduce the main long-run and business cycle features of European economies, and it integrates a rich menu of fiscal variables, including fiscal rules. Thes...

The recent revival of interest in nominal GDP (NGDP) targeting has come in the context of large advanced economies. We argue that the case for NGDP targeting is even more appealing for midsized developing countries, because they tend to be more susceptible to supply shocks and terms of trade shocks. For India, in particular, one major exogenous supply shock is the monsoon rains. NGDP targeting ...

This paper assess the role played by exchange rate and FX intervention in setting monetary policy interest rates Peru. We estimate a Taylor rule that includes inflation, output gap using New Keynesian DSGE model follows closely Schmitt-Grohé Uribe (2017). The is extended to include an explicit sterilized as Faltermeier et al. main empirical results show, for pre Inflation Targeting (IT) IT peri...

Abstract Tax is a financial charge imposed on individuals by state in different forms like direct tax paid directly by individuals, indirect tax collected by intermediaries and deposited to Government like sales tax. Taxation plays an important role in the process of revenue generation and to run various activities in an economy. The study empirically demonstrates various factors involved in di...

for their helpful comments and Carmini Michelitsh for providing spread data. 2 Summary In the 1990s, international bond issues by developing countries have surged dramatically and become one of the fastest growing devices of external development financing. Also, their terms have improved due to increased institutional investors interest in emerging market securities and better economic prospect...