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It's not factor accumulation: stylized facts and growth models
The central problem in understanding economic development and growth is not, in fact, to understand the process by which an economy raises its savings rate and increases the rate of physical capital accumulation. Many development practitioners and researchers continue to target capital accumulation ...
Optimal inflation targeting under alternative fiscal regimes
Inflation targeting has become an increasingly popular approach to the conduct of monetary policy worldwide since the early 1990s. Most of the countries that have adopted inflation targeting judge the experiment favorably, at least thus far. In many countries, the adoption of inflation targeting has ...
A toolkit for analyzing alternative policies in the chilean economy
As noted by Leeper (1995) “the business pages of leading newspapers give the impression that the effects of alternative monetary policies on the macroeconomy are well understood and predictable.” They tend “to write with great certainty that when the monetary authority raises interest rates it slows ...
A sticky-information general equilibrium model for policy analysis
Following on Keynes’s desire that economists be as useful as dentists, Lucas (1980) argues that this would amount to the following: “Our task, as I see it, is to write a FORTRAN program that will accept specific economic policy rules as ‘input’ and will generate as ‘output’ statistics describing the ...
The effects of business cycles on growth
This paper explores the links between business cycles and long-run growth. Although it is clear from a theoretical point of view that both of these phenomena are driven by the same macroeconomic variables, the interaction between economic fluctuations and growth has been largely ignored in the academic ...
Under what conditions can inflation targeting be adopted? The experience of emerging markets
Inflation targeting has become an increasingly popular monetary policy strategy, with 21 countries (8 industrial and 13 emerging market economies) targeting inflation and others considering following in their footsteps. Numerous studies of inflation targeting in industrial countries have been conducted, ...
External vulnerability and preventive policies
Emerging market economies endure significant macroeconomic volatility. The large correlation between external factors, e.g., terms of trade and world interest rate shocks, and domestic macroeconomic volatility is highly suggestive of their key role, but it does not explain the mechanism through which ...
General equilibrium models for the Chilean economy
General equilibrium theory and modeling have proved to be useful for understanding economic interactions between markets and agents and the determination of prices and quantities. Applied general equilibrium models (GEM) have been developed and used to address a wide range of theoretical questions and ...
Fifteen years of new growth economics: what have we learned?
Paul Romer’s paper, “Increasing Returns and Long-Run Growth,” is now fifteen years old. This pathbreaking contribution led to a resurgence in research on economic growth. The resulting literature has in had a number of important impacts. In particular, it shifted the research focus of macroeconomists. ...