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Europe > Ireland

You are looking at 1 - 4 of 4 items for :

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Cover IMF Working Papers
Monetary Policy and the Relative Price of Durable Goods
Mr. Alessandro Cantelmo
and
Mr. Giovanni Melina
In a SVAR model of the US, the response of the relative price of durables to a monetary contraction is either flat or mildly positive. It significantly falls only if narrowly defined as the ratio between new-house and nondurables prices. These findings are rationalized via the estimation of a two-sector New-Keynesian (NK) models. Durables prices are estimated to be as sticky as nondurables, leading to a flat relative price response to a monetary shock. Conversely, house prices are estimated to be almost flexible. Such results survive several robustness checks and a three-sector extension of the NK model. These findings have implications for building two-sector NK models with durable and nondurable goods, and for the conduct of monetary policy.
Keywords:
WP; durable goods; monetary policy; durables; nondurables; price stickiness; relative price; nondurable goods; markup shock; price indexation; nondurables price; monetary policy shock; Sticky prices; Housing; Housing prices; Consumption; Inflation
Cover IMF Working Papers
Effectiveness and Channels of Macroprudential Instruments: Lessons from the Euro Area
Mr. Thierry Tressel
and
Ms. Yuanyan S Zhang
The crisis has highlighted the importance of setting up macro-prudential oversight frameworks, having effective macro-prudential instruments in place to be called upon to mitigate growing financial imbalances as needed. We develop a new approach using the euro area Bank Lending Survey to assess the effectiveness of macro-prudential policies in containing credit growth and house price appreciation in mortgage markets. We find instruments targeting the cost of bank capital most effective in slowing down mortgage credit growth, and that the impact is transmitted mainly through price margins, the same banking channel as monetary policy. Limits on loan-to-value ratios are also effective, especially when monetary policy is excessively loose.
Keywords:
WP; lending standard; mortgage loan; cost of funds; house price appreciation; macroprudential policy; LTV ratios; capital requirement; mortage; bank lending; credit growth; lending survey; liquidity position; Mortgages; Housing prices; Credit; Estimation techniques; Financial statements; Global
Cover IMF Working Papers
Regional Trade Agreements Versus Broad Liberalization: Which Path Leads to Faster Growth? Time-Series Evidence
Mr. Athanasios Vamvakidis
Should a closed economy open its trade to all countries or limit itself to participation in regional trade agreements (RTAs)? Based on time-series evidence for a data set for 1950-92, this paper estimates and compares the growth performance of countries that liberalized broadly and those that joined an RTA. The comparisons show that economies grew faster after broad liberalization, both in the short and long run, but slower after participation in an RTA. Economies also had higher investment shares after broad liberalization, but lower ones after joining an RTA. The policy implications support broad liberalization.
Keywords:
WP; trade share; RTA dummy; Years before; open economy; Economic Growth of Open Economies; RTAs lead; investment share; liberalization case; Trade policy; Trade liberalization; Population growth; Trade barriers; Logit models; Global
Cover IMF Working Papers
Is Regionalism Simply a Diversion? Evidence from the Evolution of the EC and EFTA
Mr. Tamim Bayoumi
and
Mr. Barry J. Eichengreen
This paper considers the impact on trade of preferential arrangements in Europe since the 1950s. Using a first difference version of the gravity model, we find that the EEC and EFTA altered the pattern of international trade. We also find evidence of trade diversion in several cases, notably that of the EEC in the 1960s.
Keywords:
WP; EEC trade; trade creation; EEC membership; free trade; EFTA country; constant term; third-country effect; Customs unions; Gravity models; Purchasing power parity; Plurilateral trade; Trade agreements; Europe; Global; Asia and Pacific