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Although the theoretical relationships are ambiguous, evidence suggestsa strong link between the choice of the exchange rate regime and economicperformance. The paper argues that adopting a pegged exchange rate canlead to lower inflation, but also to slower growth in productivity. Itfinds that on average per capita GDP growth was slightly faster underfloating regimes than under pegged exchange regimes.

Economic growth --- International finance --- Foreign Exchange --- Inflation --- Price Level --- Deflation --- Currency --- Foreign exchange --- Macroeconomics --- Exchange rate arrangements --- Exchange rates --- Floating exchange rates --- Conventional peg --- Prices

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Ukraine’s gas pricing policy subsidizes gas and heating for all households. As the cost of imported gas rises, this policy increasingly weighs on government finances, sustains energy over-consumption, dampens investment in delivery systems, and undermines incentives for domestic production. However, gas price hikes have been deferred to the medium-term as they are politically unpopular. Through estimation of household demand functions by income quintiles to evaluate the distributional consequences of tarrif reform, this paper finds that tariff reforms combined with targeted social support can address the economic inefficiencies of the current pricing policy without large welfare costs to the lower income segments of the population.

Business & Economics --- Industries --- Natural gas --- Prices --- Economic aspects --- Gas, Natural --- Sour gas --- Gases, Asphyxiating and poisonous --- Hydrocarbons --- Macroeconomics --- Public Finance --- Taxation --- Aggregate Factor Income Distribution --- Trade Policy --- International Trade Organizations --- Macroeconomics: Consumption --- Saving --- Wealth --- Price Level --- Inflation --- Deflation --- National Government Expenditures and Related Policies: General --- Public finance & taxation --- Income --- Tariffs --- Consumption --- Price elasticity --- Expenditure --- National accounts --- Taxes --- Tariff --- Economics --- Expenditures, Public --- Ukraine

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We empirically revisit the crowding-in effect of government spending on private consumption based on rolling windows of U.S. data. Results show that in earlier samples government spending is increasingly crowding in private consumption; however, this relation is reverted in the latest periods. We propose a model embedding non-separable public and private consumption in the utility function and rule-of-thumb consumers to assess the sources of non-monotonic changes in the transmission of the shock. The iterative full information estimation of the model reveals that changes in the co-movement between private and public spending is primarily driven by the fluctuations in the elasticity of substitution between private and public consumption, the share of financially constrained consumers, and the elasticity of intertemporal substitution.

Monetary policy. --- Monetary management --- Economic policy --- Currency boards --- Money supply --- Monetary policy --- E-books --- Labor --- Macroeconomics --- Public Finance --- National Government Expenditures and Related Policies: General --- Macroeconomics: Consumption --- Saving --- Wealth --- Wages, Compensation, and Labor Costs: General --- Price Level --- Inflation --- Deflation --- Public finance & taxation --- Labour --- income economics --- Expenditure --- Private consumption --- Consumption --- Real wages --- Sticky prices --- National accounts --- Prices --- Expenditures, Public --- Economics --- Wages --- United States

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Rejecting a common assumption in the sovereign debt literature, we document that creditor losses (“haircuts”) during sovereign restructuring episodes are asymmetric across debt instruments. We code a comprehensive dataset on instrument-specific haircuts for 28 debt restructurings with private creditors in 1999–2015 and find that haircuts on shorter-term debt are larger than those on debt of longer maturity. In a standard asset pricing model, we show that increasing short-run default risk in the run-up to a restructuring episode can explain the stylized fact. The data confirms the predicted relation between perceived default risk, bond prices, and haircuts by maturity.

Exports and Imports --- Financial Risk Management --- Investments: General --- Investments: Bonds --- Macroeconomics --- International Lending and Debt Problems --- Open Economy Macroeconomics --- Debt --- Debt Management --- Sovereign Debt --- General Financial Markets: General (includes Measurement and Data) --- Price Level --- Inflation --- Deflation --- Investment & securities --- International economics --- Finance --- Asset prices --- Bonds --- Securities --- Debt default --- Debt restructuring --- Prices --- Financial institutions --- External debt --- Asset and liability management --- Debts, External --- Financial instruments --- Greece

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We develop a theory of money and credit as competing payment instruments, then put it to work in applications. Buyers can use cash or credit, with the former (latter) subject to the inflation tax (transaction costs). Frictions that make the choice of payment method interesting also imply equilibrium price dispersion. We deliver closed-form solutions for money demand. We then show the model can simultaneously account for the price-change facts, cash-credit shares in micro payment data, and money-interest correlations in macro data. We analyze the effects of inflation on welfare, price dispersion and markups. We also describe nonstationary equilibria as self-fulfilling prophecies, which is standard, except here it entails dynamics in the price distribution.

Econometric models. --- Economic forecasting. --- Economics --- Forecasting --- Economic indicators --- Econometrics --- Mathematical models --- Inflation --- Macroeconomics --- Money and Monetary Policy --- Price Level --- Deflation --- Money Supply --- Credit --- Money Multipliers --- Monetary Policy --- Monetary Systems --- Standards --- Regimes --- Government and the Monetary System --- Payment Systems --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Demand for Money --- Monetary economics --- Demand for money --- Currencies --- Sticky prices --- Money --- Prices --- Canada