Fabio Ghironi

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We develop a baseline model of monetary and fiscal transmission in interdependent economies. The welfare effects of expansionary policies are related to monopolistic supply in production and monopoly power of a country in trade. An unanticipated exchange rate depreciation can be beggar-thyself rather than beggar-thy-neighbor, as gains in domestic output are(More)
We develop a stochastic, general equilibrium, two-country model of trade and macroeconomic dynamics. Productivity differs across individual, monopolistically competitive firms in each country. Firms face a sunk entry cost in the domestic market and both fixed and per-unit export costs. Only relatively more productive firms export. Exogenous shocks to(More)
This paper characterizes welfare in a small open economy and derives the corresponding optimal monetary policy rule. It shows that the utility-based loss function for a small open economy is a quadratic expression in domestic inflation, output gap and real exchange rate. In contrast to previous works, this paper demonstrates that welfare in a small open(More)
This paper studies the role of endogenous producer entry and product creation for monetary policy analysis and business cycle dynamics in a general equilibrium model with imperfect price adjustment. Optimal monetary policy stabilizes producer prices, but lets the consumer price index vary to accommodate changes in the number of available products. The free(More)
  • Gian Luca Clementi, Berardino Palazzo, +5 authors Ramon Marimon
  • 2010
Do firm entry and exit play a major role in shaping aggregate dynamics? Our answer is yes. Entry and exit amplify and propagate the effects of aggregate shocks. In turn, this leads to greater persistence and unconditional variation of aggregate time series. These results stem from well-documented features of firm dynamics such as pro– cyclical entry and the(More)
External Members of the Monetary Policy Committee and their dedicated economic staff. Papers are made available as soon as practicable in order to share research results and stimulate further discussion of key policy issues. However, the views expressed are those of the authors and do not represent the views of the Bank of England or necessarily the views(More)
This paper builds a framework for the analysis of macroeconomic fluctuations that incorporates the endogenous determination of the number of producers and products over the business cycle. Economic expansions induce higher entry rates by prospective entrants subject to irreversible investment costs. The sluggish response of the number of producers (due to(More)
This paper proposes a model to investigate the effects of monetary policy in an emerging market economy that experiences a sudden stop of capital inflows. The model features credit frictions, debt denominated in foreign currency, imported inputs, and households that have access to the international capital market only indirectly, through their ownership of(More)
While outsourcing of production from the U.S. to Mexico has been hailed in Mexico as a valuable engine of growth, recently there have been misgivings regarding the fickleness and volatility of this engine. This paper is among the first in the trade literature to focus on the second moment properties of outsourcing. We begin by documenting a new stylized(More)