Jean-Christophe Poutineau

Short-Run and Long-Run Effects of Banking in a New Keynesian Model

This paper introduces both endogenous capital accumulation and deposit-in-advance requirements for investment in the banking model of Goodfriend and McCallum (2007). Impulse response functions from technology and monetary shocks show some attenuation effect due to the procyclical behavior of the marginal finance cost. In addition, an adverse financial shock produces sizeable declines in output, inflation and interest rates. In the long-run analysis, we finnd the following effects of banking intermediation: (i) the stock of capital increases to take advantage of its collateral services, and (ii) consumption and labor fall in response to the finance cost attached to purchases of goods. Using the baseline calibrated model, we show how a 10 percent increase in banking efficiency would result in a permanent welfare gain equivalent to 0.3 percent of output.

Firm Entry under Financial Frictions

How does a general-equilibrium model behave when incorporating competitive firm entry that requires external finance? After conducting a steady-state analysis, we reach three main results. First, the financial constraint has contractionary effects on both equity investment and the labor supply as they are inversely related to the marginal finance cost. Second, the dynamics of firm creation and destruction amplify the impact of changes in either productivity or banking efficiency due to procyclical firm entry. Third, a higher elasticity of substitution (that implies a lower mark-up) cuts the number of firms and makes aggregate output fall.

A primer on macroprudential policy

This article introduces macroprudential policy using a static New Keynesian Macroeconomics model with financial frictions. The authors analyze two related questions: First, they show how the procyclicality of financial factors, captured by the financial accelerator, amplifies the transmission of supply and demand shocks and impacts the intuition they get from a basic intermediate macroeconomics. Second, adopting an optimal policy perspective, they show how a policymaker may use macroprudential policy to complete monetary policy measures. Following the Mundellian Policy Assignment principle, macroprudential policy should be specialized to address the procyclicality problem to suppress welfare losses associated with the building of financial imbalances, thus helping monetary policy to concentrate on the output inflation tradeoff.

International Monetary Policy Coordination in a New Keynesian Model with NICE Features.

ABSTRACT The authors provide a static two-country new Keynesian model to teach two related questions in international macroeconomics: the international transmission of unilateral monetary policy decisions and the gains coming from the coordination monetary rules. They concentrate on “normal times” and use a thoroughly graphical approach to analyze the questions at hand. In this setting monetary policy is conducted using interest rates rules and economic integration between nations does not necessarily create the case for the coordination of monetary policy. In particular, they show that the conduct of optimal national monetary policies does not make any difference with the coordination of national policies, as this creates a situation where the international monetary system operates “Near an International Cooperative Equilibrium” (NICE).

Les consequences de la crise financiere sur le commerce intra -Europeen

Cet article revient sur la maniere dont la crise fi nanciere de 2008 s’est transmise a la partie reelle de l’economie a travers le commerce bilateral entre les pays membres de l’Union europeenne et comment celui-ci a evolue depuis. Pour apprecier l’incidence de cette crise, nous adoptons une logique de moyen terme de 1997 a 2013 a partir d’observations annuelles des fl ux bilateraux entre les 28 membres de l’Union. Nous distinguons notamment le comportement des marges intensive et extensive du commerce entre les Peco en fonction de leur appartenance a l’euro ou non. Les resultats revelent des diff erences notables sur la repartition des fl ux entre marges extensive et intensive, sur leur variabilite et sur leur synchronisation, notamment entre les Peco selon qu’ils ont rejoint l’euro ou pas.