The Resource Financial market imperfections and macroeconomic policies, Maren Froemel

Financial market imperfections and macroeconomic policies, Maren Froemel

Label
Financial market imperfections and macroeconomic policies
Title
Financial market imperfections and macroeconomic policies
Statement of responsibility
Maren Froemel
Creator
Contributor
Subject
Language
eng
Summary
This thesis contributes to the literature emphasizing the role of incomplete financial markets for the design of macroeconomic policies. I use two main frameworks for my analysis: In a small open economy model with default risk and incomplete markets, I study two questions addressing how predictions for optimal fiscal policy over the business cycle change in the presence of borrowing constraints. I use a standard incomplete markets model with heterogeneous agents to assess how government policies can alleviate the welfare losses caused by financial frictions. In the first chapter I argue that government spending can optimally be procyclical when governments cannot borrow in recessions. I decompose total expenditure into public goods and social spending and show that the latter component is crucial in driving this result. Furthermore, I show that higher income inequality exacerbates the welfare losses from conducting countercyclical policies without financial market access. The second chapter of this thesis is joint work with C. Gottlieb. We analyze to which extent a simple redistributive policy in the form of transfers can alleviate the welfare losses caused by frictional insurance markets. We find that targeting transfers towards low income households improves welfare, but reduces output per hours worked. Redistribution is more effective, and welfare is higher than under lumpsum transfers at low tax rates. In the third chapter, I study the role of spending rules on optimal tax policy in a small open economy with a government that lacks commitment to repay its external debt. I find that neither pro- nor countercyclical policy rules qualitatively change the predictions for optimal tax policy
Member of
Cataloging source
IT-FiEUI
http://library.link/vocab/creatorName
Froemel, Maren
Date time place
Defence date: 13 February 2014
Dissertation note
Thesis (Ph. D.)--European University Institute (ECO), 2014.
Index
no index present
Literary form
non fiction
Nature of contents
theses
http://library.link/vocab/relatedWorkOrContributorName
European University Institute
Series statement
  • EUI PhD theses
  • EUI theses
http://library.link/vocab/subjectName
  • Capital market
  • Macroeconomics
Label
Financial market imperfections and macroeconomic policies, Maren Froemel
Instantiates
Publication
Note
Examining Board: Professor Árpád Ábrahám, European University Institute (Supervisor); Professor Timothy J. Kehoe, University of Minnesota; Professor Ramon Marimon, European University Institute; Professor Franck Portier, Toulouse School of Economics
Bibliography note
Includes bibliographical references (pages 107-108)
Carrier category
volume
Carrier category code
nc
Carrier MARC source
rdacarrier.
Content category
text
Content type code
txt
Content type MARC source
rdacontent.
Control code
FIEb17512657
Dimensions
30 cm.
Extent
viii, 108 pages
Media category
unmediated
Media MARC source
rdamedia.
Media type code
n
System control number
(OCoLC)881304714
Label
Financial market imperfections and macroeconomic policies, Maren Froemel
Publication
Note
Examining Board: Professor Árpád Ábrahám, European University Institute (Supervisor); Professor Timothy J. Kehoe, University of Minnesota; Professor Ramon Marimon, European University Institute; Professor Franck Portier, Toulouse School of Economics
Bibliography note
Includes bibliographical references (pages 107-108)
Carrier category
volume
Carrier category code
nc
Carrier MARC source
rdacarrier.
Content category
text
Content type code
txt
Content type MARC source
rdacontent.
Control code
FIEb17512657
Dimensions
30 cm.
Extent
viii, 108 pages
Media category
unmediated
Media MARC source
rdamedia.
Media type code
n
System control number
(OCoLC)881304714

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