Economics Working Papers

"Mexico’s Integration into NAFTA Markets: A View from Sectoral Real Exchange Rates" (2008-12-17)
by Rodolphe Blavy, and Luciana Juvenal
Working Paper 2008-046A. Using a self-exciting threshold autoregressive model, we confirm the presence of nonlinearities in sectoral real exchange rate (SRER) dynamics across Mexico, Canada and the US in the pre-NAFTA and post-NAFTA periods. More...

"Inventories, Liquidity, and the Macroeconomy" (2008-12-01)
by Yi Wen
Working Paper 2008-045A. It is widely believed in the literature that inventory fluctuations are destabilizing to the economy. This paper re-assesses this view by developing an analytically-tractable general-equilibrium model of inventory dynamics based on a precautionary stockout-avoidance motive. More...

"Dynamics of Externalities: A Second-Order Perspective" (2008-11-24)
by Yi Wen, and Huabin Wu
Working Paper 2008-044A. We show that increasing returns to scale (due to production externalities) may induce a strong degree of asymmetric income effects and nonlinear dynamics that are not fully appreciated by linear approximation methods. More...

"The Stability of Macroeconomic Systems with Bayesian Learners" (2008-11-17)
by James B. Bullard, and Jacek Suda
Working Paper 2008-043A. We study abstract macroeconomic systems in which expectations play an important role. Consistent with the recent literature on recursive learning and expectations, we replace the agents in the economy with econometricans. More...

"Do European Capital Flows Comove?" (2008-11-04)
by Silvio Contessi, and Pierangelo DePace
Working Paper 2008-042A. We study the cross-sectional correlations of net, total, and disaggregated capital flows for the major source and recipient European Union countries. We seek evidence of changes in these correlations since the introduction of the euro to understand whether the European Union can be considered a unique entity with regard to its international capital flows. More...