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National Repository of Grey Literature 2 records found  Search took 0.00 seconds. 
Macroeconomic adjustment to monetary union
 Fagan, Gabriel ; Gaspar, Vitor
This paper documents the key stylised facts of this experience and provides a compact two-country model, based on the Blanchard-Yaari setup, to analyze this phenomenon. This model, though simple, is able to broadly capture the main qualitative features of the adjustment. Using this model, writers show that the creation of the monetary union leads to an increase in welfare for all generations in both country groups.
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The impact of demographic changes on the real interest rate and international capital flows.
 Dybczak, Kamil ; Kodera, Jan (advisor) ; Izák, Vratislav (referee) ; Šmídková, Kateřina (referee)
The demographic structure seems to change dramatically over the next 50 years in the Czech Republic. The aim of this study is to assess the impact of expected demographic changes on the future development of a real interest rate and international capital flows. In order to simulate the impact of the expected demographic changes upon the mentioned variables we apply a computable overlapping generations model. The real interest rate development is simulated under a closed economy assumption. As a result of the future expected demographic changes labour-capital ratio tends to fall, i.e. the real interest rate diminishes. The range of a change is significantly affected by a public budget closure rule. In case of an endogenous income tax rate, the real interest rate falls down by 0.5 percentage point. On the contrary, the real interest rate decreases by almost 1 percentage point in case when public transfers adjusted. Assuming an open economy, we simulate the impact of the expected demographic changes on the international capital flows between the domestic economy and the rest of the world. In case of increasing ratio of older agents, the aggregate domestic wealth surpasses the demand for capital by domestic firms. As a result a part of domestic capital is exported abroad. Increasing level of net foreign assets contributes to positive change in ratio of the balance of payment to the domestic production in a range from 2 to 5 percentage points over next 40 years if income taxes or public transfers change respectively.
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