Emmanuel Farhi
Biographic Data
| ID | 1190969 |
|---|---|
| NAME | Emmanuel Farhi |
| GIVEN NAMES | Emmanuel |
| FAMILY NAME | Farhi |
| SIGNATURE | FARHI E |
| AFFILIATIONS | Harvard University Press |
| ORCID | 0000-0002-8508-8106 |
| VERIFIED | Yes |
| TOTAL WORKS | 12 |
| TOTAL CITATIONS | 15 |
| AUTHOR COUNT | 12 |
| EDITOR COUNT | 0 |
| FIRST PUBLICATION YEAR | 2007 |
| LATEST PUBLICATION YEAR | 2024 |
| H-INDEX | 2 |
The Supply-Side Effects of Monetary Policy
The Supply-Side Effects of Monetary Policy
Monetary Policy, Product Market Competition and Growth
In this paper we argue that monetary easing fosters growth more in more credit‐constrained environments, and the more so the higher the degree of product market competition. Indeed, when competition is low, large rents allow firms to stay on the market and reinvest optimally, no matter how funding conditions change with aggregate conditions. To test this prediction, we use industry‐level and firm‐level data from the euro area to look at the effec…
Monetary Policy, Product Market Competition, and Growth
The Safe Assets Shortage Conundrum
A safe asset is a simple debt instrument that is expected to preserve its value during adverse systemic events. The supply of safe assets, private and public, has historically been concentrated in a small number of advanced economies, most prominently the United States. Over the last few decades, with minor cyclical interruptions, the supply of safe assets has not kept up with global demand. The reason is straightforward: the collective growth ra…
Monetary Policy, Liquidity, and Growth
In this paper, we use cross-industry, cross-country panel data to test whether industry growth is positively affected by the interaction between the reactivity of real short term interest rates to the business cycle and industry-level measures of financial constraints. Financial constraints are measured, either by the extent to which an industry is prone to being "credit constrained", or by the extent to which it is prone to being "liquidity cons…
Capital Taxation: Quantitative Explorations of the Inverse Euler Equation
Economies with private information provide a rationale for capital taxation. In this paper we ask what the welfare gains from following this prescription are. We develop a method to answer this question in standard general equilibrium models with idiosyncratic uncertainty and incomplete markets. We find that general equilibrium forces are important and greatly reduce the welfare gains. Once these effects are taken into account, the gains are rela…
La TVA sociale, une solution aux problèmes de compétitivité
Capital Taxation and Ownership When Markets Are Incomplete
This paper analyzes the theoretical and quantitative implications of optimal capital taxation in the neoclassical growth model with aggregate shocks and incomplete markets. The model features a representative-agent economy with proportional taxes on labor and capital. I first consider the case that the only asset the government can trade is a real risk-free bond. Taxes on capital are set one period in advance, reflecting inertia in tax codes and …
Collective Moral Hazard, Maturity Mismatch and Systemic Bailouts
An Equilibrium Model of “Global Imbalances” and Low Interest Rates
The sustained rise in US current account deficits, the stubborn decline in long-run real rates, and the rise in US assets in global portfolios appear as anomalies from the perspective of conventional models. This paper rationalizes these facts as an equilibrium outcome when different regions of the world differ in their capacity to generate financial assets from real investments. Extensions of the basic model generate exchange rate and foreign di…
Inequality and Social Discounting
We explore steady-state inequality in an intergenerational model with altruistically linked individuals who experience privately observed taste shocks. When the welfare function depends only on the initial generation, efficiency requires immiseration: inequality grows without bound and everyoneâ€TMs consumption converges to zero. We study other efficient allocations in which the welfare function values future generations directly, placing a posit…
The Safe Assets Shortage Conundrum
A safe asset is a simple debt instrument that is expected to preserve its value during adverse systemic events. The supply of safe assets, private and public, has historically been concentrated in a small number of advanced economies, most prominently the United States. Over the last few decades, with minor cyclical interruptions, the supply of safe assets has not kept up with global demand. The reason is straightforward: the collective growth ra…
Inequality and Social Discounting
We explore steady-state inequality in an intergenerational model with altruistically linked individuals who experience privately observed taste shocks. When the welfare function depends only on the initial generation, efficiency requires immiseration: inequality grows without bound and everyoneâ€TMs consumption converges to zero. We study other efficient allocations in which the welfare function values future generations directly, placing a posit…
Capital Taxation: Quantitative Explorations of the Inverse Euler Equation
Economies with private information provide a rationale for capital taxation. In this paper we ask what the welfare gains from following this prescription are. We develop a method to answer this question in standard general equilibrium models with idiosyncratic uncertainty and incomplete markets. We find that general equilibrium forces are important and greatly reduce the welfare gains. Once these effects are taken into account, the gains are rela…
Monetary Policy, Product Market Competition and Growth
In this paper we argue that monetary easing fosters growth more in more credit‐constrained environments, and the more so the higher the degree of product market competition. Indeed, when competition is low, large rents allow firms to stay on the market and reinvest optimally, no matter how funding conditions change with aggregate conditions. To test this prediction, we use industry‐level and firm‐level data from the euro area to look at the effec…
Inequality and Social Discounting
We explore steady-state inequality in an intergenerational model with altruistically linked individuals who experience privately observed taste shocks. When the welfare function depends only on the initial generation, efficiency requires immiseration: inequality grows without bound and everyoneâ€TMs consumption converges to zero. We study other efficient allocations in which the welfare function values future generations directly, placing a posit…
An Equilibrium Model of “Global Imbalances” and Low Interest Rates
The sustained rise in US current account deficits, the stubborn decline in long-run real rates, and the rise in US assets in global portfolios appear as anomalies from the perspective of conventional models. This paper rationalizes these facts as an equilibrium outcome when different regions of the world differ in their capacity to generate financial assets from real investments. Extensions of the basic model generate exchange rate and foreign di…
Collective Moral Hazard, Maturity Mismatch and Systemic Bailouts
Capital Taxation and Ownership When Markets Are Incomplete
This paper analyzes the theoretical and quantitative implications of optimal capital taxation in the neoclassical growth model with aggregate shocks and incomplete markets. The model features a representative-agent economy with proportional taxes on labor and capital. I first consider the case that the only asset the government can trade is a real risk-free bond. Taxes on capital are set one period in advance, reflecting inertia in tax codes and …
Monetary Policy, Liquidity, and Growth
In this paper, we use cross-industry, cross-country panel data to test whether industry growth is positively affected by the interaction between the reactivity of real short term interest rates to the business cycle and industry-level measures of financial constraints. Financial constraints are measured, either by the extent to which an industry is prone to being "credit constrained", or by the extent to which it is prone to being "liquidity cons…
Capital Taxation: Quantitative Explorations of the Inverse Euler Equation
Economies with private information provide a rationale for capital taxation. In this paper we ask what the welfare gains from following this prescription are. We develop a method to answer this question in standard general equilibrium models with idiosyncratic uncertainty and incomplete markets. We find that general equilibrium forces are important and greatly reduce the welfare gains. Once these effects are taken into account, the gains are rela…
La TVA sociale, une solution aux problèmes de compétitivité
The Safe Assets Shortage Conundrum
A safe asset is a simple debt instrument that is expected to preserve its value during adverse systemic events. The supply of safe assets, private and public, has historically been concentrated in a small number of advanced economies, most prominently the United States. Over the last few decades, with minor cyclical interruptions, the supply of safe assets has not kept up with global demand. The reason is straightforward: the collective growth ra…
Monetary Policy, Product Market Competition, and Growth
Monetary Policy, Product Market Competition and Growth
In this paper we argue that monetary easing fosters growth more in more credit‐constrained environments, and the more so the higher the degree of product market competition. Indeed, when competition is low, large rents allow firms to stay on the market and reinvest optimally, no matter how funding conditions change with aggregate conditions. To test this prediction, we use industry‐level and firm‐level data from the euro area to look at the effec…
The Supply-Side Effects of Monetary Policy
The Supply-Side Effects of Monetary Policy
Economics (11 works) · Monetary economics (8 works) · Econometrics (5 works) · Economic theories and models (5 works) · Global Financial Crisis and Policies (5 works) · Market economy (5 works) · Microeconomics (5 works) · Monetary policy (5 works) · Monetary Policy and Economic Impact (5 works) · Banking stability, regulation, efficiency (4 works)