Arbeitspapier
Can a small New Keynesian model of the world economy with risk-pooling match the facts?
We ask whether a model of the US and Europe trading with the rest of the world can match the facts of world behaviour in a powerful indirect inference test. One version has uncovered interest parity (UIP), the other risk-pooling. Both pass the test but the most probable is risk-pooling. This is consistent with risk-pooling failing a number of single equation tests, as has been found in past work; we show that these tests will typically reject risk-pooling when it in fact prevails. World economic behaviour under risk-pooling shows much stronger spillovers than under UIP with opposite monetary responses to the exchange rate. We argue that the risk-pooling model therefore demands more attention from policy-makers.
- Sprache
-
Englisch
- Erschienen in
-
Series: Cardiff Economics Working Papers ; No. E2019/10
- Klassifikation
-
Wirtschaft
Hypothesis Testing: General
General Aggregative Models: Keynes; Keynesian; Post-Keynesian
Open Economy Macroeconomics
- Thema
-
Open economy
UIP
risk-pooling
test
Indirect Inference
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Minford, Patrick
Ou, Zhirong
Zhu, Zheyi
- Ereignis
-
Veröffentlichung
- (wer)
-
Cardiff University, Cardiff Business School
- (wo)
-
Cardiff
- (wann)
-
2019
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:41 MEZ
Datenpartner
Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Minford, Patrick
- Ou, Zhirong
- Zhu, Zheyi
- Cardiff University, Cardiff Business School
Entstanden
- 2019
Ähnliche Objekte (12)
Classical or gravity? Which trade model best matches the UK facts?
Can the learnability criterion ensure determinacy in New Keynesian models?
Determinacy in new Keynesian models: A role for money after all?
Is there consumer risk-pooling in the open economy? The evidence reconsidered
Where next for monetary policy? Lessons from the financial crisis and the pandemic
Post-Brexit realism and international law: Renegotiating a bad Withdrawal Agreement
Commentary on economic projections and rules of thumb for monetary policy (by Athanasios Orphanides and Volker Wieland)
Understanding UK trade agreements with the EU and other countries
The banking crisis: A rational interpretation
A note rebutting the recent Cambridge Econometrics assessment of Brexit on the UK and London economies: Commissioned by London Mayor Khan
Free Trade under Brexit: Why its benefits have been widely underestimated
The effects of Brexit on the UK economy
Classical or gravity? Which trade model best matches the UK facts?
Can the learnability criterion ensure determinacy in New Keynesian models?
Determinacy in new Keynesian models: A role for money after all?
Is there consumer risk-pooling in the open economy? The evidence reconsidered
Where next for monetary policy? Lessons from the financial crisis and the pandemic
Post-Brexit realism and international law: Renegotiating a bad Withdrawal Agreement
Commentary on economic projections and rules of thumb for monetary policy (by Athanasios Orphanides and Volker Wieland)
Understanding UK trade agreements with the EU and other countries
The banking crisis: A rational interpretation
A note rebutting the recent Cambridge Econometrics assessment of Brexit on the UK and London economies: Commissioned by London Mayor Khan
Free Trade under Brexit: Why its benefits have been widely underestimated
The effects of Brexit on the UK economy
Classical or gravity? Which trade model best matches the UK facts?
Can the learnability criterion ensure determinacy in New Keynesian models?
Determinacy in new Keynesian models: A role for money after all?
Is there consumer risk-pooling in the open economy? The evidence reconsidered
Where next for monetary policy? Lessons from the financial crisis and the pandemic
Post-Brexit realism and international law: Renegotiating a bad Withdrawal Agreement
Commentary on economic projections and rules of thumb for monetary policy (by Athanasios Orphanides and Volker Wieland)
Understanding UK trade agreements with the EU and other countries
The banking crisis: A rational interpretation
A note rebutting the recent Cambridge Econometrics assessment of Brexit on the UK and London economies: Commissioned by London Mayor Khan
Free Trade under Brexit: Why its benefits have been widely underestimated