 | Professor of Economics, Columbia University Verified email at columbia.edu Cited by 6220 |
The small open economy model with incomplete asset markets features a steady state that
depends on initial conditions and equilibrium dynamics that possess a random walk
component. A number of modifications to the standard model have been proposed to ...
S Schmitt-Grohe… - Journal of Economic Dynamics and Control, 2004 - Elsevier
This paper characterizes conditions under which interest-rate feedback rules that set the
nominal interest rate as an increasing function of the inflation rate induce aggregate
instability by generating multiple equilibria. It shows that these conditions depend not only ...
This paper studies optimal. scal and monetary policy under sticky product prices. The
theoretical framework is a stochastic production economy without capital. The government
finances an exogenous stream of purchases by levying distortionary income taxes, ...
This paper computes welfare-maximizing monetary and fiscal policy rules in a real business
cycle model augmented with sticky prices, a demand for money, taxation, and stochastic
government consumption. We consider simple feedback rules whereby the nominal ...
Since John Taylor's (1993, Carnegie–Rochester Conf. Ser. Publ Policy39, 195–214),
seminal paper, a large literature has argued that active interest rate feedback rules, that is,
rules that respond to increases in inflation with a more than one-for-one increase in the ...
M Uribe… - Journal of International Economics, 2006 - Elsevier
This paper attempts to disentangle the intricate relation linking the world interest rate,
country spreads, and emerging-market fundamentals. It does so by using a methodology
that combines empirical and theoretical elements. The main findings are:(1) US interest ...
Once the zero bound on nominal interest rates is taken into account, Taylor-type interest rate
feedback rules give rise to unintended self-fulfilling decelerating inflation paths and
aggregate fluctuations driven by arbitrary revisions in expectations. These undesirable ...
A traditional argument against a balanced-budget fiscal policy rule is that it amplifies
business cycles by stimulating aggregate demand during booms via tax cuts and higher
public expenditures and by reducing demand during recessions through a corresponding ...
M Ravn,
S SCHMITT‐GROHÉ… - Review of Economic …, 2006 - Wiley Online Library
This paper generalizes the standard habit-formation model to an environment in which
agents form habits over individual varieties of goods as opposed to over a composite
consumption good. We refer to this preference specification as deep habit formation. ...
... Page 2. STEPHANIE SCHMITT-GROHE AND MARTIN URIBE : 483 the present discounted value
of seigniorage revenue lost due to dollarization is likely to be at least twice a country's
predollarization monetary base. A second source of costs is the lack of a lender of last resort. ...
This paper addresses a classic question in macroeconomics, namely: How should a
benevolent government conduct stabilization policy? A central characteristic of all existing
studies is that optimal policy is derived in highly stylized environments. Typically, optimal ...
M Uribe - Journal of Monetary Economics, 1997 - Elsevier
This paper studies the initial effects of exchange-rate-based stabilization programs within a
dynamic general equilibrium model of a small open economy in which inflation acts as a tax
on intermediate transactions and capital accumulation is subject to convex adjustment ...
In this paper, we perform a structural Bayesian estimation of the contribution of anticipated
shocks to business cycles in the postwar United States. Our theoretical framework is a real-
business-cycle model augmented with four real rigidities: investment adjustment costs, ...
M Uribe - Journal of Monetary Economics, 1997 - Elsevier
... Author Keywords: Currency substitution; Dollarization; Network externalities. JEL classification
codes: E41; F41. Article Outline. • References. JO Moneta .,ou ai of o.eta Economics 40 1997)
ECONOMICS Hysteresis in a simple model of currency substitution Martin Uribe* Board of ...
This paper analyzes the implications of a balanced-budget fiscal policy rule for price-level
determination in a cash-in-advance economy under three alternative monetary policy
regimes. It shows that the price level is indeterminate under a nominal interest rate peg ...
This paper identifies optimal interest-rate rules within a rich, dynamic, general equilibrium
model that has been shown to account well for observed aggregate dynamics in the postwar
United States. We perform policy evaluations based on second-order accurate ...
A number of studies have stressed the role of movements in US interest rates and country
spreads in driving business cycles in emerging market economies. At the same time, country
spreads have been found to respond to changes in both the US interest rate and domestic ...
J Garcia-Cicco, R Pancrazi… - 2006 - nber.org
We use more than one century of Argentine and Mexican data to estimate the structural
parameters of a small-open-economy real-business-cycle model driven by nonstationary
productivity shocks. We find that the RBC model does a poor job at explaining business ...
Using panel structural VAR analysis and quarterly data from four industrialized countries, we
document that an increase in government purchases leads to an expansion in output and
private consumption, a deterioration in the trade balance, and a depreciation of the real ...
EG Mendoza,
M Uribe - … -Rochester Conference Series on Public Policy, 2000 - Elsevier
What is the mechanism driving the business cycle associated with stabilization policies
anchored on managed exchange rates? Perfect-foresight models used extensively to try to
answer this question have been unable to explain key quantitative features of the data. To ...
The existing literature on the stabilizing properties of interest-rate feedback rules has
stressed the perils of linking interest rates to forecasts of future inflation. Such rules have
been found to give rise to aggregate fluctuations due to self-fulfilling expectations. In ...
G Picone,
M Uribe… - Journal of Health Economics, 1998 - Elsevier
We analyze the effect of the uncertainty of the incidence of illness on the demand for medical
care and on the accumulation of health capital and wealth over the retirement years. We use
a simplified version of a dynamic Grossman household production model to characterize ...
S Schmitt-Grohe… - Monetary Policy Under Inflation Targeting, 2007 - nber.org
Abstract This paper characterizes Ramsey-optimal monetary policy in a medium-scale
macroeconomic model that has been estimated to fit well postwar US business cycles. We
find that mild deflation is Ramsey optimal in the long run. However, the optimal inflation ...
M Uribe - Journal of Monetary Economics, 2002 - Elsevier
A defining stylized fact associated with exchange-rate-based stabilization programs is that
their initial phase is characterized by several years of continuous expansion in private
consumption and a gradual appreciation of the real exchange rate. This paper shows that ...
ABSTRACT This paper shows that some key stylized facts of exchange-rate-based
stabilization plans can be explained by the uncertain duration of the plans themselves.
Uncertain duration is modeled to reflect evidence showing that devaluation probabilities ...
J Fernández-Villaverde, PA Guerrón-Quintana… - 2009 - nber.org
This paper shows how changes in the volatility of the real interest rate at which small open
emerging economies borrow have a quantitatively important effect on real variables like
output, consumption, investment, and hours worked. To motivate our investigation, we ...
Abstract: A growing empirical and theoretical literature argues in favor of specifying
monetary policy in the form of Taylor-type interest rate feedback rules. That is, rules whereby
the nominal interest rate is set as an increasing function of inflation with a slope greater ...
This paper characterizes Ramsey-optimal monetary policy in a medium-scale
macroeconomic model that has been estimated to fit well postwar US\ business cycles. We
find that mild deflation is Ramsey optimal in the long run. However, the optimal inflation ...
M Uribe - Journal of Monetary Economics, 2006 - Elsevier
Under certain monetary-fiscal regimes the risk of default and thus the emergence of
sovereign risk premiums are inevitable. This paper argues that in this context even small
differences in the specification of monetary policy can have enormous effects on the ...
Observed inflation targets around the industrial world are concentrated at two percent per
year. This chapter investigates the extent to which the observed magnitudes of inflation
targets are consistent with the optimal rate of inflation predicted by leading theories of ...
M Uribe - Journal of International Economics, 2003 - Elsevier
Using an optimizing model of a small open economy, this paper studies the macroeconomic
effects of PPP rules whereby the government increases the devaluation rate when the real
exchange rate—defined as the price of tradables in terms of nontradables—is below its ...
This paper presents a fiscal theory of sovereign risk and default. Under certain monetary-
fiscal regimes, the risk of default, and thus the emergence of sovereign risk premia, are
inevitable. The paper characterizes the equilibrium processes of the sovereign risk ...
J Fernández-Villaverde… - The American …, 2011 - ingentaconnect.com
Abstract: We show how changes in the volatility of the real interest rate at which small open
emerging economies borrow have an important effect on variables like output, consumption,
investment, and hours. We start by documenting the strong evidence of time-varying ...
This paper compares the equilibrium dynamics of an economy facing an aggregate
collateral constraint on external debt to the dynamics of an economy facing a collateral
constraint imposed at the level of each individual agent. The aggregate collateral ...
M Uribe - manuscript, Duke University, Spring, 2006 - sfu.ca
... 1I would like to thank Javier Garcıa-Cicco, Felix Hammermann, and Stephanie Schmitt-Grohé
for comments and suggestions. Comments welcome. 2Columbia University and NBER. E-mail:
martin.uribe@columbia.edu. Page 2. ii Page 3. Contents 1 A First Look at the Data 1 ...
This paper shows that the risk of devaluation can be an important factor accounting for the
stylized facts of exchange-rate-based stabilizations. This conclusion follows from studying
the quantitative implications of a two-sector equilibrium business cycle model of a small ...
We compare two ways of modeling Calvo-type wage stickiness. One in which each
household is the monopolistic supplier of a differentiated type of labor input (as in Erceg, et
al., 2000) and one in which households supply a homogenous labor input that is ...
In his seminal 1960 article Robert Mundell proposed a model of balance-of-payments crises
in which confidence in the continuation of a currency peg depended on the observed
holdings of central bank foreign reserves. We examine the implications of a reformulation ...
Page 1. Dollarization and Seignorage: How Much Is at Stake? ∗ Stephanie
Schmitt-Grohé† Rutgers University Martın Uribe‡ University of Pennsylvania July
9, 1999 When a country decides to replace its domestic currency with ...
M Uribe - Journal of Development Economics, 1999 - Elsevier
Page 1. Board of Governors of the Federal Reserve System International Finance Discussion
Papers Number 617 August 1998 THE BUSINESS CYCLES OF CURRENCY SPECULATION:
AREVISION OF THE MUNDELLIAN FRAMEWORK Enrique G. Mendoza and Martín Uribe ...
M Uribe - International Finance Discussion Papers, 1996 - federalreserve.gov
ABSTRACT The Tequila E ect hypothesis states that the economic crisis that a ected several
South American countries in 1995 was caused by an exogenous capital ight triggered by the
loss of con dence of foreign investors after the collapse of the Mexican peso in December ...
This paper studies the role of asset-market completeness for the properties of optimal policy.
A suitable framework for this purpose is the small open economy with complete international
asset markets. For in this environment changes in policy represent country-specific risk ...
This paper identifies a new source of business-cycle fluctuations. Namely, a common
stochastic trend in neutral and investment-specific productivity. We document that in US
postwar quarterly data total factor productivity (TFP) and the relative price of investment ...
[CITATION] Whatms news in business cycles
S Schmitt&Grohe… - 2008 - working paper
Abstract: A key result of a recent literature that focuses on the global consequences of Taylor-
type interest rate feedback rules is that such rules, in combination with the zero-bound on
nominal interest rates, can lead to unintended liquidity traps. An immediate question ...
A number of empirical studies document that marginal cost shocks are not fully passed
through to prices at the firm level and that prices are substantially less volatile than costs. We
show that in the relative-deep-habits model of Ravn, Schmitt-Grohé, and Uribe [Ravn, M., ...
This paper proposes a novel international transmission mechanism based on the
assumption of deep habits. The term deep habits stands for a preference specification
according to which consumers form habits on a good-by-good basis. Under deep habits, ...
Abstract This paper explores the macroeconomic consequences of preferences displaying a
subsistence point. It departs from the existing related literature by assuming that subsistence
points are specific to each variety of goods rather than to the composite consumption good ...
J Benhabib,
S Schmitt-Grohé… - Manuscript, University of …, 2000 - econ.duke.edu
Page 1. Appendix to 'Monetary Policy and Multiple Equilibria' Not for publication Jess
Benhabib Stephanie Schmitt-Grohé Martın Uribe∗ March 13, 2000 AA model with
Calvo-Yun-type price staggering In this appendix, we develop ...
[CITATION] Habit persistence
S Schmitt-Grohé… - The New Palgrave Dictionary of Economics, second …, 2007
Abstract: A defining stylized fact associated with exchange-rate-based (ERB) stabilization
programs is that their initial phase is characterized by several years of expansion in private
consumption and a gradual appreciation of the real exchange rate. In this paper, I argue ...
[CITATION] Designing Monetary Policy: Backward-Looking Interest-Rate Rules and Interest Rate Smoothing
J Benhabib, S Schmitt-Grohé… - 2002 - Mimeo, Rutgers University, October
This paper explores the macroeconomic consequences of preferences displaying a
subsistence point. It departs from the existing related literature by assuming that subsistence
points are specific to each variety of goods rather than to the composite consumption good ...
The SVAR and narrative approaches to estimating tax multipliers deliver significantly
different results. The former yields multipliers of about 1 percent, whereas the latter produces
much larger multipliers of about 3 percent. The SVAR and narrative approaches differ ...
[CITATION] forthcoming, Optimal simple and implementable monetary and fiscal rules
S Schmitt-Grohé… - Journal of Monetary Economics
[CITATION] Optimal Fiscal and Monetary Policy in Open Economy
S Schmitt-Grohe… - 2002 - mimeo, Rutgers University and …
Abstract: This paper makes three contributions to the supply-side theory of the real effects of
exchange-rate-based disinflation: First, the empirical relevance of the supply-side
hypothesis has been questioned on the grounds of its reliance on the assumption that ...
M Uribe - International Finance Discussion Papers, 1996 - ideas.repec.org
This paper compares the welfare costs and initial dynamics of three alternative inflation
stabilization policies using the staggered price model with imperfect credibility and currency
substitution developed by Calvo and Vegh (1990). In addition to the policies analyzed by ...
[CITATION] Optimal Operational Interest-Rate Rules in the Christiano-Eichenbaum-Evans Model of the US Business Cycle
S Schmitt-Grohé… - Duke University, August, 2004
... Martín Uribe Department of Economics Columbia University International Affairs Building New
York, NY 10027 and NBER martin.uribe@columbia.edu Page 3. 1 Introduction More than half
of US currency circulates abroad. Porter and Judson (1996), for instance, ...
[CITATION] lOn Overborrowingm
M Uribe - American Economic Review Papers and Proceed, 2006
S Schmitt‐Grohé… - International Journal of Economic …, 2009 - Wiley Online Library
Skip to Main Content. ...
A growing empirical and theoretical literature argues in favor of specifying monetary policy in
the form of Taylor-type interest rate feedback rules. That is, rules whereby the nominal
interest rate is set as an increasing function of inflation with a slope greater than one ...
S Schmitt-Grohé… - Federal Reserve Bank of Richmond …, 2008 - econ.duke.edu
... Columbia University, CEPR, and NBER. E-mail: stephanie.schmittgrohe@columbia.edu.
†Columbia University and NBER. E-mail: martin.uribe@columbia.edu. Page 2. conduct of
monetary policy in the United States and elsewhere over the past thirty years ...
J Garcıa-Cicco, R Pancrazi… - unpublished, …, 2009 - comisiondistorsionesdeprecios.cl
... We are grateful to Alejandro Gay for facilitating access to the series on Argentine
private consumption shares. †E-mail: jg55@duke.edu. ‡E-mail: rp21@duke.edu.
§E-mail: martin.uribe@columbia.edu. Page 2. 1 Introduction ...
[CITATION] Exchange-Rate-Based Inflation Stabilization: The Initial Real Effects
M Uribe-Echevarria - 1993 - mimeo, University of Chicago
J Garcıa-Cicco, R Pancrazi… - available on this journal's …, 2009 - columbia.edu
... E-mail: jgarcia-cicco@bcentral.cl. ‡E-mail: rp21@duke.edu. §E-mail: martin.uribe@
columbia.edu. Page 2. [ 1 + φ (Kt+1 Kt − g )] λt = β g γ t Etλt+1 [ 1 − δ + αat+1
(Xt+1ht+1 Kt+1 )1−α +φ (Kt+2 Kt+1 )(Kt+2 Kt+1 − g ) − φ 2 (Kt+2 Kt+1 − g )2] ...
Much of our recent research has been devoted to developing and applying tools for the
evaluation of macroeconomic stabilization policy. This choice of topic is motivated by the fact
that by the late 1990s empirical research using macroeconomic data from industrialized ...
M Uribe… - Proceedings, 2001 - ideas.repec.org
This paper studies optimal fiscal and monetary policy under sticky product prices. The
theoretical framework is a stochastic production economy without capital. The government
finances an exogenous stream of purchases by levying distortionary income taxes, ...
[CITATION] Liquidity traps with global Taylor Rules
SG Stephanie… - International Journal of Economic Theory, 2009
[CITATION] 2006/Comparing Two Variants of Calvo-Type Wage Stickiness
S Schmitt-Grohe… - Duke University
[CITATION] Real Business Cycle in Emerging Countries?'
GC Javier, P Roberto… - 2009 - NBER Working Papers 12629, …
[CITATION] Hysteresis in a model of currency substitution
M Uribe - Journal of Monetary Economics, 1997
[CITATION] Forthcoming.“Optimal Fiscal and Monetary Policy under Sticky Prices.”
S Schmitt-Grohé… - Journal of Economic Theory
[CITATION] Real business cycles in emerging economies
GC Javier, R Pancrazi… - 2009 - Mimeo Columbia University
[CITATION] Government Transfers and the Friedman Rule
S Schmitt-Grohé… - manuscript, Duke University, 2005
[CITATION] Computing Ramsey Equilibria in Medium-Scale Macroeconomic Models
[CITATION] Optimal Inflation Stabilization in a Medium-Scale Macroeconomic Model: Technical Appendix
S Schmitt-Grohé… - manuscript, Duke University, 2005
Page 1. Risk Matters: The Real Effects of Volatility Shocks! Jesús Fernández$Villaverde University
of Pennsylvania, NBER, and CEPR Pablo Guerrón$Quintana North Carolina State University
Juan F. Rubio$Ramírez Duke University and Federal Reserve Bank of Atlanta ...
This paper studies, within a general equilibrium model, the dynamics of Year Ž. 2000 Y2K-
type shocks: anticipated, permanent losses in output whose magnitude can be lessened by
investing resources in advance. The implied dynamics replicate Ž. three observed ...
... Martín Uribe Department of Economics Columbia University International Affairs Building New
York, NY 10027 and NBER martin.uribe@columbia.edu Page 3. 1 Introduction The United States
is in a liquidity trap. The short-term nominal interest rate has been ...
... 1I would like to thank Javier Garcıa-Cicco, Felix Hammermann, Manfred Jager- Ambrozewicz,
Krisztina Orban, and Stephanie Schmitt-Grohé for comments and suggestions. Comments
welcome. 2Columbia University and NBER. E-mail: martin.uribe@columbia.edu. Page 2. ii ...
[CITATION] Optimal Fiscal and Monetary Policy in a Medium-Scale
Page 1. Why the monopolist does not deviate from the symmetric equilibrium in a
Model with Good-Specific Subsistence Points Stephanie Schmitt-Grohé∗ Mart´ın
Uribe† August 8, 2007 In this note, we investigate whether the ...
Page 1. Designing Monetary Policy: Backward-Looking Interest-Rate Rules∗ Jess
Benhabib New York University Stephanie Schmitt-Grohé Rutgers University, CEPR,
and NBER Martın Uribe University of Pennsylvania and NBER ...
... Columbia University, CEPR, and NBER. E-mail: stephanie.schmittgrohe@columbia.edu.
†Columbia University and NBER. E-mail: martin.uribe@columbia.edu. Page 2. When confronted
with the current crisis in peripheral Europe, many specialists in emerging- ...
A policy issue central banks are confronted with is whether inflation targets should be
adjusted to account for the systematic upward bias in measured inflation due to quality
improvements in consumption goods. We show that in the context of a Ramsey ...
... Columbia University, CEPR, and NBER. E-mail: stephanie.schmittgrohe@columbia.edu.
†Columbia University and NBER. E-mail: martin.uribe@columbia.edu. Page 2. 1 Introduction
Fixed-exchange rate arrangements are often part of broader economic reform programs that ...
... Columbia University, CEPR, and NBER. E-mail: stephanie.schmittgrohe@columbia.edu.
†Columbia University and NBER. E-mail: martin.uribe@columbia.edu. Page 2. 1 Introduction
A characteristic of the current European crisis is that countries in the Southern periphery ...
J Fernández-Villaverde, P Guerrón-Quintana… - 2010 - aeaweb.org
Page 1. Technical Appendix to: “Risk Matters: The Real Effects of Volatility Shocks” Jesús
Fernández-Villaverde University of Pennsylvania, NBER, and CEPR Pablo Guerrón-Quintana
Federal Reserve Bank of Philadelphia Juan F. Rubio-Ramírez ...
S Schmitt-Grohe… - EconomicDynamics Newsletter, 2004 - econpapers.repec.org
Abstract: Stephanie Schmitt-Grohé and Martín Uribe are Professors of Economics at Duke
University. Their main line of interest lies in monetary macroeconomics, in particular issues of
optimal stabilisation policy. ... Related works: This item may be available elsewhere in ...
DP2942 Optimal Fiscal and Monetary Policy Under Sticky Prices. Author(s ...
S Schmitt-Grohe… - Review of Economic Dynamics, 2011 - econpapers.repec.org
Downloads: (external link) http://dx.doi.org/10.1016/j.red.2010.12.002 Access to full texts is restricted
to ScienceDirect subscribers and institutional members. See http://www.sciencedirect.com/ for
details. ... Related works: This item may be available elsewhere in EconPapers: Search ...
DP7128 Deep Habits and the Dynamic Effects of Monetary Policy Shocks. ...
Abstract: This paper compares the welfare costs and initial dynamics of three alternative
inflation stabilization policies using the staggered price model with imperfect credibility and
currency substitution developed by Calvo and Vegh (1990). In addition to the policies ...
... The first contribution of the Benigno, Benigno, and Nistic`o paper is to empirically identify three
sources of time-varying volatility: monetary-policy volatility shocks, inflation-target volatility shocks,
*Columbia University and NBER. E-mail: martin.uribe@columbia.edu. 1 Page 2. ...
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