NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

NBER Working Papers by Andrea Ferrero

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Working Papers

May 2016The Great Escape? A Quantitative Evaluation of the Fed’s Liquidity Facilities
with Marco Del Negro, Gauti Eggertsson, Nobuhiro Kiyotaki: w22259
We introduce liquidity frictions into an otherwise standard DSGE model with nominal and real rigidities and ask: Can a shock to the liquidity of private paper lead to a collapse in short-term nominal interest rates and a recession like the one associated with the 2008 U.S. financial crisis? Once the nominal interest rate reaches the zero bound, what are the effects of interventions in which the government provides liquidity in exchange for illiquid private paper? We find that the effects of the liquidity shock can be large, and show some numerical examples in which the liquidity facilities prevented a repeat of the Great Depression in 2008-2009.
April 2008Current Account Dynamics and Monetary Policy
with Mark Gertler, Lars E.O. Svensson: w13906
We explore the implications of current account adjustment for monetary policy within a simple two-country DSGE model. Our framework nests Obstfeld and Rogoff's (2005) static model of exchange rate responsiveness to current account reversals. It extends this approach by endogenizing the dynamic adjustment path and by incorporating production and nominal price rigidities in order to study the role of monetary policy. We consider two different adjustment scenarios. The first is a "slow burn" where the adjustment of the current account deficit of the home country is smooth and slow. The second is a "fast burn" where, owing to a sudden shift in expectations of relative growth rates, there is a rapid reversal of the home country's current account. We examine several different monetary policy reg...

Published: Current Account Dynamics and Monetary Policy, Andrea Ferrero, Mark Gertler, Lars E. O. Svensson. in International Dimensions of Monetary Policy , Galí and Gertler. 2009

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