(The standard models assumed that the economy was buffeted by exogenous shocks; most crisis shocks are, however, endogenous manmade.) Four hypotheses are presented about how the structure of the economy changed (sometimes as a result of policy) in ways that increased the likelihood of a large...
Two extreme, definitive, answers to the question posed in the title and one more murky and incomplete can be contemplated. The first holds that we have learned nothing from the Real Business Cycle (RBC) programme on the subject of frictions simply becaus
Macroeconomics is the branch of economics that studies the economy as one whole unit. It tries to understand how the whole economy functions with keen interests in the inflation rate of an economy, the gross domestic product and the employment rate that the entire economy is registering. On ...
What are the international spillover effects of country-specific shocks? The mechanisms that govern the transmission of shocks in open economies have been central to works in international macroeconomics. The objective of this paper is to study how labor market rigidities might influence the internation...
What macroeconomic principles are affected by unemployment? Unemployment and Macroeconomic Trends Unemployment rates are generally fall under the category of macroeconomics instead of microeconomics since it is not industry specific and focuses on the economy as a whole....
In this context, this present work will test the effects of possible exogenous shocks of carbon prices on carbon emissions. The analysis will be expanded to test the response of economic, financial, energy, and climate dimensions. Those are relevant aspects that influence and are influenced by ca...
Negative supply shocks slow production, causing prices to rise, while a positive supply shock increases economic output, causing prices to fall. These shocks are often the result of unexpected events that constrain output or interrupt the supply chain, such as natural disasters and geopolitical ...
In this study, we explore the effect of news shocks in explaining exchange rate movements using a new open economy macroeconomics (NOEM) model based on Lubik and Schorfheide (2006, hereafter abbreviated as LS). The novel element in our model is the inclusion of both unanticipated and anticipate...
The reason is potentially that divorced or widowed work- ers suffer shocks, specifically those related to psychological and financial factors after being free from marriage. This situation leads the affected workers to recover from shocks by moonlighting, thereby ful- filling personal needs and ...
are not in a position to prevent another crisis: “The relatively modest changes of the types discussed [in the book] – and that policymakers are putting into place in some cases – are helpful but unlikely to be enough to prevent future financial shocks from inflicting large economic harms....