Found 43 article(s) for author 'Gita Gopinath'

Sticky Borders

Sticky Borders. Gita Gopinath and Roberto Rigobon, 2008, Paper. “The stickiness and currency of pricing of traded goods play a central role in international macroeconomics; however, empirical evidence on these features is seriously limited. To address this, we use micro data on U.S. import and export prices at the dock for the period 1994–2005 and present four main results: First, the median price duration in the currency of pricing is 10.6 (12.8) months for imports (exports). Second, 90% (97%) of imports (exports) are priced in dollars. Consequently, contrary to standard modeling assumptions…” Link

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Emerging Market Business Cycles: The Cycle is the Trend

Emerging Market Business Cycles: The Cycle is the Trend. Mark Aguiar and Gita Gopinath, 2007, Paper. “Emerging market business cycles exhibit strongly countercyclical current accounts, consumption volatility that exceeds income volatility, and “sudden stops” in capital inflows. These features contrast with developed small open economies. Nevertheless, we show that a standard model characterizes both types of markets. Motivated by the frequent policy regime switches observed in emerging markets, our premise is that these economies are subject to substantial volatility in trend growth. Our methodology exploits…” Link

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Efficient Expropriation: Sustainable Fiscal Policy in a Small Open Economy

Efficient Expropriation: Sustainable Fiscal Policy in a Small Open Economy, By Aguiar, Mark, Manuel Amador, and Gita Gopinath. 2006

We study a small open economy characterized by two empirically important frictions – incomplete financial markets and an inability of the government to commit to policy. We characterize the best sustainable fiscal policy and show that it can amplify and prolong shocks to output. In particular, even when the government is completely benevolent, the government’s credibility not to expropriate capital endogenously varies with the state of the economy and may be “scarcest” during recessions. This increased threat of expropriation depresses investment, prolonging downturns. It is the incompleteness of financial markets and lack of commitment that generate investment cycles even in an environment where first best capital stock is constant. Link

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