Die ZBW räumt Ihnen als Nutzerin/Nutzer das unentgeltliche, räumlich unbeschränkte und zeitlich a... more Die ZBW räumt Ihnen als Nutzerin/Nutzer das unentgeltliche, räumlich unbeschränkte und zeitlich auf die Dauer des Schutzrechts beschränkte einfache Recht ein, das ausgewählte Werk im Rahmen der unter
We present a general framework for thinking about symbolic values in economic settings. Our theor... more We present a general framework for thinking about symbolic values in economic settings. Our theory enables one to think about the value systems that are consistent with a given resource allocation, and the resource allocations that can be supported by a given value system. Thus, it naturally leads to the notion of a "socio-economic equilibrium", the e ¢ ciency properties of which can be studied using the standard tools of economic analysis. In order to illustrate the potential of our theoretical framework for helping understanding key economic issues, we develop simple models in which people attach a symbolic value to occupations. The models shed some light on the transition from traditional to modern values, the emergence of tolerant societies, and the possibility of failing economic development because of a cultural trap.
This paper presents a two-country model of the world economy with money and nominal stickiness in... more This paper presents a two-country model of the world economy with money and nominal stickiness in which countries may be affected by demand shocks. We show that a negative demand shock in one country may push the world economy in a global liquidity trap with unemployment and zero nominal interest rates in both countries. Global monetary stimulus (a temporary increase in both countries’ inflation targets) may restore the first-best level of employment and welfare. Fiscal stimulus may restore full employment but distorts the allocation of consumption between private and public goods. We also study the international spillovers associated with each policy, and the risk that they lead to trade protectionism.
There has been a lot of interest since the global financial crisis in policies allowing emerging ... more There has been a lot of interest since the global financial crisis in policies allowing emerging market economies to smooth the effects of the global financial cycle. Although the literature has focused mostly on capital controls emerging market governments have relied mostly on international reserves management. This paper discusses the role of reserves in capital flow management based on a simple welfare-based model of capital flows with international banking frictions.
The link between monetary policy and asset price movements has been of perennial interest to poli... more The link between monetary policy and asset price movements has been of perennial interest to policy makers. The 1920s stock market boom and 1929 crash and the 1980s Japanese asset bubble are two salient examples where it is widely believed that monetary authorities geared their actions to the behavior of key asset prices and caused a financial disaster.
Standard theoretical arguments tell us that countries with relatively little capital benefit from... more Standard theoretical arguments tell us that countries with relatively little capital benefit from financial integration as foreign capital flows in and speeds up the process of convergence. We show in calibrated exercises that conventionally measured welfare gains from this type of convergence appear relatively limited for the typical emerging country. The traditional theory, then, does not seem to provide a sufficient rationale for capital account liberalization. Our approach emphasizes instead that poor countries face a number of distortions that ...
IMF Manuscript (Washington: International Monetary Fund), Oct 25, 2005
Financial globalization is commonly viewed as a powerful force in constraining or disciplining do... more Financial globalization is commonly viewed as a powerful force in constraining or disciplining domestic policies. This paper presents a model that captures various ways in which international capital mobility affects domestic policy incentives. Capital mobility supports reform in two ways: 1) capital inflows enhance the benefits of good policies; 2) liberalizing capital outflows may lock in political support for reforms. On the downside, capital mobility makes possible selffulfilling capital flight that destroys the domestic ...
I present a tractable model of a global economy in which countries attempt to boost their employm... more I present a tractable model of a global economy in which countries attempt to boost their employment and welfare by depreciating their currencies and making their goods more competitive-a "currency war"-or by imposing a tariff on imports-a "trade war." Because of downward rigidity in nominal wages the global economy may be in a liquidity trap with less than full employment. In such a situation a trade war further depresses global demand and leads to large welfare losses (amounting to about 10 percent of potential GDP under our benchmark calibration). By contrast, currency war in which countries depreciate their currencies by raising their inflation targets restores full employment and leads to large welfare gains. The uncoordinated use of capital controls leads to symmetry breaking, with a fraction of countries competitively devaluing their currency and lending their surpluses to deficit countries at a low interest rate.
This paper discusses some problems posed by foreign currency debt for emerging economies in the c... more This paper discusses some problems posed by foreign currency debt for emerging economies in the context of the ongoing debate on the reform of the global "nancial architecture. We present a model in which the currency composition of corporate debt is endogenous, and discuss the optimality of measures aimed at coping with the risks posed by foreign currency debt. While removing these risks is not necessarily e$cient in the presence of moral hazard, some forms of public intervention, such as a tax on foreign currency debt or international bailouts, may be optimal.
Many emerging market economies use foreign exchange interventions or capital controls at the same... more Many emerging market economies use foreign exchange interventions or capital controls at the same time as they float their currencies, a policy mix that is not explained by Mundell's policy trilemma. This paper presents a simple model that accounts for this fact. In the model, changes in foreign appetite for domestic assets lead to a trade-off between stabilizing the tradable sector and stabilizing the nontradable sector. The model is consistent with a number of stylized facts about the impact of the global financial cycle on emerging market economies, and on the policies used by emerging markets to mitigate this impact. Consistent with Rey's dilemma thesis, the benefits of using countercyclical capital flow taxes may be substantially larger than the benefits of floating. The paper also discusses the reasons that capital flow taxes are not more popular in practice.
formed melanosomes, supporting Masson's view that neoplastic nerve sheath cells are capable of me... more formed melanosomes, supporting Masson's view that neoplastic nerve sheath cells are capable of melanogenesis [21-23]. Based on ultrastructural data, they have characterized their experimental tumors as malignant nerve sheath tumors with melanogenic capability rather than as melanomas or as mixed tumors of malignant Schwannomas that have incorporated a distinct population of neoplastic or nonneoplastic melanocytes [30]. The presence of melanosomes in various stages of formation indicates that Schwann cells can be melanogenic. Materials and Methods Human skin was obtained by punch biopsy from the palmar aspect of the forearm of Solomon Islanders by the Harvard Solomon Islands Expeditions, an anthropological and biomedical research project of the Department of Anthropology and Peabody Museum, Harvard University. Studies on various aspects of Solomon Islander skin pigmentation have been reported [7, 8]. Skin was fixed in phosphate-buffered (pH 7.4) Ito-Karnovsky fixative [15] for 2 h, postfixed for 1 h in OsO4, stained en bloc with uranyl acetate, dehydrated in graded ethanols, infiltrated with propylene oxide and embedded in Epon. Thin sections were cut with a diamond knife using a Porter-Blum MT-2 nltramicrotome, stained with uranyl acetate and lead citrate, and examined in an AEI 6B or an AEI Corinth 275 electron microscope. Scrotal skin of adult black Long-Evans rats (Blue Spruce Farms, Altamont, N. Y.) was excised by scalpel blade and processed as above. Animals were raised conventionally and kept on a standard diet and water adlibitum [9,10].
Fragilité des systèmes de change fixe et contrôle des capitaux In: Économie & prévision. Numéro 1... more Fragilité des systèmes de change fixe et contrôle des capitaux In: Économie & prévision. Numéro 123-124, 1996-2-3. Économie des taux de change. pp. 163-174.
Die ZBW räumt Ihnen als Nutzerin/Nutzer das unentgeltliche, räumlich unbeschränkte und zeitlich a... more Die ZBW räumt Ihnen als Nutzerin/Nutzer das unentgeltliche, räumlich unbeschränkte und zeitlich auf die Dauer des Schutzrechts beschränkte einfache Recht ein, das ausgewählte Werk im Rahmen der unter
We present a general framework for thinking about symbolic values in economic settings. Our theor... more We present a general framework for thinking about symbolic values in economic settings. Our theory enables one to think about the value systems that are consistent with a given resource allocation, and the resource allocations that can be supported by a given value system. Thus, it naturally leads to the notion of a "socio-economic equilibrium", the e ¢ ciency properties of which can be studied using the standard tools of economic analysis. In order to illustrate the potential of our theoretical framework for helping understanding key economic issues, we develop simple models in which people attach a symbolic value to occupations. The models shed some light on the transition from traditional to modern values, the emergence of tolerant societies, and the possibility of failing economic development because of a cultural trap.
This paper presents a two-country model of the world economy with money and nominal stickiness in... more This paper presents a two-country model of the world economy with money and nominal stickiness in which countries may be affected by demand shocks. We show that a negative demand shock in one country may push the world economy in a global liquidity trap with unemployment and zero nominal interest rates in both countries. Global monetary stimulus (a temporary increase in both countries’ inflation targets) may restore the first-best level of employment and welfare. Fiscal stimulus may restore full employment but distorts the allocation of consumption between private and public goods. We also study the international spillovers associated with each policy, and the risk that they lead to trade protectionism.
There has been a lot of interest since the global financial crisis in policies allowing emerging ... more There has been a lot of interest since the global financial crisis in policies allowing emerging market economies to smooth the effects of the global financial cycle. Although the literature has focused mostly on capital controls emerging market governments have relied mostly on international reserves management. This paper discusses the role of reserves in capital flow management based on a simple welfare-based model of capital flows with international banking frictions.
The link between monetary policy and asset price movements has been of perennial interest to poli... more The link between monetary policy and asset price movements has been of perennial interest to policy makers. The 1920s stock market boom and 1929 crash and the 1980s Japanese asset bubble are two salient examples where it is widely believed that monetary authorities geared their actions to the behavior of key asset prices and caused a financial disaster.
Standard theoretical arguments tell us that countries with relatively little capital benefit from... more Standard theoretical arguments tell us that countries with relatively little capital benefit from financial integration as foreign capital flows in and speeds up the process of convergence. We show in calibrated exercises that conventionally measured welfare gains from this type of convergence appear relatively limited for the typical emerging country. The traditional theory, then, does not seem to provide a sufficient rationale for capital account liberalization. Our approach emphasizes instead that poor countries face a number of distortions that ...
IMF Manuscript (Washington: International Monetary Fund), Oct 25, 2005
Financial globalization is commonly viewed as a powerful force in constraining or disciplining do... more Financial globalization is commonly viewed as a powerful force in constraining or disciplining domestic policies. This paper presents a model that captures various ways in which international capital mobility affects domestic policy incentives. Capital mobility supports reform in two ways: 1) capital inflows enhance the benefits of good policies; 2) liberalizing capital outflows may lock in political support for reforms. On the downside, capital mobility makes possible selffulfilling capital flight that destroys the domestic ...
I present a tractable model of a global economy in which countries attempt to boost their employm... more I present a tractable model of a global economy in which countries attempt to boost their employment and welfare by depreciating their currencies and making their goods more competitive-a "currency war"-or by imposing a tariff on imports-a "trade war." Because of downward rigidity in nominal wages the global economy may be in a liquidity trap with less than full employment. In such a situation a trade war further depresses global demand and leads to large welfare losses (amounting to about 10 percent of potential GDP under our benchmark calibration). By contrast, currency war in which countries depreciate their currencies by raising their inflation targets restores full employment and leads to large welfare gains. The uncoordinated use of capital controls leads to symmetry breaking, with a fraction of countries competitively devaluing their currency and lending their surpluses to deficit countries at a low interest rate.
This paper discusses some problems posed by foreign currency debt for emerging economies in the c... more This paper discusses some problems posed by foreign currency debt for emerging economies in the context of the ongoing debate on the reform of the global "nancial architecture. We present a model in which the currency composition of corporate debt is endogenous, and discuss the optimality of measures aimed at coping with the risks posed by foreign currency debt. While removing these risks is not necessarily e$cient in the presence of moral hazard, some forms of public intervention, such as a tax on foreign currency debt or international bailouts, may be optimal.
Many emerging market economies use foreign exchange interventions or capital controls at the same... more Many emerging market economies use foreign exchange interventions or capital controls at the same time as they float their currencies, a policy mix that is not explained by Mundell's policy trilemma. This paper presents a simple model that accounts for this fact. In the model, changes in foreign appetite for domestic assets lead to a trade-off between stabilizing the tradable sector and stabilizing the nontradable sector. The model is consistent with a number of stylized facts about the impact of the global financial cycle on emerging market economies, and on the policies used by emerging markets to mitigate this impact. Consistent with Rey's dilemma thesis, the benefits of using countercyclical capital flow taxes may be substantially larger than the benefits of floating. The paper also discusses the reasons that capital flow taxes are not more popular in practice.
formed melanosomes, supporting Masson's view that neoplastic nerve sheath cells are capable of me... more formed melanosomes, supporting Masson's view that neoplastic nerve sheath cells are capable of melanogenesis [21-23]. Based on ultrastructural data, they have characterized their experimental tumors as malignant nerve sheath tumors with melanogenic capability rather than as melanomas or as mixed tumors of malignant Schwannomas that have incorporated a distinct population of neoplastic or nonneoplastic melanocytes [30]. The presence of melanosomes in various stages of formation indicates that Schwann cells can be melanogenic. Materials and Methods Human skin was obtained by punch biopsy from the palmar aspect of the forearm of Solomon Islanders by the Harvard Solomon Islands Expeditions, an anthropological and biomedical research project of the Department of Anthropology and Peabody Museum, Harvard University. Studies on various aspects of Solomon Islander skin pigmentation have been reported [7, 8]. Skin was fixed in phosphate-buffered (pH 7.4) Ito-Karnovsky fixative [15] for 2 h, postfixed for 1 h in OsO4, stained en bloc with uranyl acetate, dehydrated in graded ethanols, infiltrated with propylene oxide and embedded in Epon. Thin sections were cut with a diamond knife using a Porter-Blum MT-2 nltramicrotome, stained with uranyl acetate and lead citrate, and examined in an AEI 6B or an AEI Corinth 275 electron microscope. Scrotal skin of adult black Long-Evans rats (Blue Spruce Farms, Altamont, N. Y.) was excised by scalpel blade and processed as above. Animals were raised conventionally and kept on a standard diet and water adlibitum [9,10].
Fragilité des systèmes de change fixe et contrôle des capitaux In: Économie & prévision. Numéro 1... more Fragilité des systèmes de change fixe et contrôle des capitaux In: Économie & prévision. Numéro 123-124, 1996-2-3. Économie des taux de change. pp. 163-174.
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Papers by Olivier Jeanne