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We build a dynamic general equilibrium model based on the theory of the NATural Real EXchange rate, as developed by Jerome L. Stein and Polly R. Allen. The model succeeds in distinguishing a medium and a long term equilibrium value of the real Belgian franc. The medium term equilibrium is determined by the variables driving the investment and saving(More)
  • CHIARA OSBAT, BERND SCHNATZ, +6 authors Jörg Clostermann
  • 2001
and an anonymous referee for their helpful comments.The views expressed in this study are those of the authors and do not necessarily reflect those of the ECB. Telex 411 144 ecb d All rights reserved. Reproduction for educational and non-commercial purposes is permitted provided that the source is acknowledged. The views expressed in this paper are those of(More)
The US financial crisis of 2008 involved the interaction of banks and security houses. The issues of " contagion " and debt crises became subjects of concern. The aim of this paper is to suggest dynamic nonlinear models of the interactions and optimization in financial markets, which explain the dynamics of contagion and the vulnerability of the financial(More)
HE FOMC'S STATED POLICY objectives are to 'foster price stability and promote sustainable growth in output!' Can these objectives be achieved with the tools available? We know that there is a long-run relationship between the ratio M/y= Money/real GDP and the P—GDP deflator of the form (a) P = V(M2/y), where V is the velocity function, shown in Figure 1~The(More)
We consider some multi-stage stochastic optimization models, which arise, in international Þnance. The evolution over time of national capital and debt are affected by controls, in the form of investment and consumption rates. The goal is to choose controls that maximize total HARA discounted utility of consumption, subject to constraints on investment and(More)