Welcome to the homepage of Giancarlo Corsetti From September 2010, Professor, University of Cambridge Pierre Werner Chair, Department of Economics and Robert Schuman Centre, European University Institute; Professor of Economics (on leave), University of Rome III; and CEPR   What is new: Optimal monetary policy in open economies joint with Luca Dedola and Sylvain Leduc, prepared for the Handbook of Monetary Economics, vol. III, Edited by Ben Friedman and Michael Woodford, mimeo 2010. NEW, CLEANER VERSION SEPTEMBER 2010 Fiscal consolidation as a policy strategy to exit the global crisis Debt Consolidation and Fiscal Stabilization of Deep Recessions, joint with Kuester, Meier and Mueller. American Economic Review PP May 2010 After the stimulus, the big retrenchment joint with Meier and Mueller, www.voxeu.org, Feb 5 2010. On the IMF vs EMF debate in Europe: a piece with Harold James for the FT The 2010 EEAG Annual Report on the European Economy Feb 23 2010. Exiting the crisis Demand Imbalances, Excange Rates Misalignment and Monetary Policy joint with Luca Dedola and Sylvain Leduc, mimeo 2010 Fiscal Stimulus with Spending Reversals, with A Meier and Gernot Mueller, April 2009. IMF working paper 09106, CEPR DP 7302. The effectiveness of fiscal policy depends on the financing and monetary policy mix, with Gernot Mueller, www.voxeu.org, November 12 2008 Cross-border spillovers from fiscal stimulus, with A Meier and Gernot Mueller, September 2009. Correlation Analysis of Financial Contagion short piece joint with Marcello Pericoli and Massimo Sbracia on pitfalls studies of contagion (2010) The International Dimension of Productivity and Demand Shocks in the US Economy, joint with Luca Dedola and Sylvain Leduc, new version April 2009 (also CEPR dp 70003, October 2008) What Drives US Foreign Borrowing? Evidence on External Adjustment to Transitory and Permanent Shocks, with Panagiotis Konstantinou, December 2008 A small piece on voxeu: The $2 trillion dollar question: How about US demand and output with Panagiotis Konstantinou, www.voxeu.org, February 18 2009 Here is my CV

Wealth effects in the international transmission

• The International Dimension of Productivity and Demand Shocks in the US Economy, joint with Luca Dedola and Sylvain Leduc, new version April 2009 (also CEPR dp 70003, October 2008)
• Productivity, External Balance and Exchange Rates: Evidence on the Transmission Mechanism Among G7 Countries with Luca Dedola and Sylvain Leduc, in Lucrezia Reichlin and Kenneth West (eds.) NBER International Seminar on Macroeconomics 2006. Revised version November 2006
• International Risk Sharing and the transmission of productivity shocks", with Luca Dedola and Sylvain Leduc .Review of Economic Studies, 2008. This is the web appendix.

Extensive margin

• Varieties, the transfer problem, and the costs of current account adjustment, joint with Philippe Martin and Paolo Pesenti, Revised Version March 2009 (also CEPR dp 6660, February 2008)
• The extensive margin and monetary policy, with Paul Bergin, Journal of Monetary Economics, 2008, previously circulated as "Towards a theory of firm entry and stabilization policy," NBER wp 11821, CEPR dp 537
• Productivity spillovers, terms of trade and the `home market effect', joint with Philippe Martin and Paolo Pesenti, Journal of International Economics 2007

Monetary Policy in Open economy

• Optimal monetary policy in open economies joint with Luca Dedola and Sylvain Leduc, prepared for the Handbook of Monetary Economics, vol. III, Edited by Ben Friedman and Michael Woodford, mimeo 2010
• Optimal Monetary Policy and the Sources of Local-Currency Price Stability Joint with Luca Dedola and Sylvain Leduc (Revised draft September 2007). Prepared for the NBER Volume: International Dimensions of Monetary Policy, edited by Jordi Gali and Mark Gertler
• New Open Economy Macroeconomics (January 2007). Entry for the New Palgrave Dictionary of Economics, 2nd edition
• The simple geometry of transmission and stabilization in closed and open economy, with Paolo Pesenti, new revised version Septemeber 2007, NBER International Seminar on Macroeconomics 2007
• Openness and the case for flexible exchange rates This paper presents a closed-form solution of a new version of the Corsetti-Pesenti model with home bias in consumption, IUE-Economics working paper 2005-21. Research and Economics 2006
• Endogenous pass-through and Optimal Monetary Policy: A Model of Self-Validating Exchange Rate Regimes with Paolo Pesenti (January 2002-revised September 2004, presented in Atlanta 2002) CEPR wp 8737
• My paper with Paolo Pesenti International Dimensions of Optimal Monetary Policy Journal of Monetary Economics, 52/2 pp 281-305, 2005
• My paper with Paolo Pesenti: Welfare and Macroeconomic Interdependence Quarterly Journal of Economics 2001
• A revised version of the paper with Paolo Pesenti, Nouriel Roubini and Cedric Tille: Competitive Devaluations: towards a welfare based approach Journal of International Economics, June 2000. Click here for a useful Technical Appendix

Exchange Rate Pass Through

• High exchange rate volatility and low pass-through, with Luca Dedola and Sylvain Leduc, Journal of Monetary Economics Sept 2008
• Optimal Monetary Policy and the Sources of Local-Currency Price Stability Joint with Luca Dedola and Sylvain Leduc (Revised draft September 2007). Prepared for the NBER Volume: International Dimensions of Monetary Policy, edited by Jordi Gali and Mark Gertler
• Newly revised version the paper with Luca Dedola: Macroeconomics of International Price Discrimination (This revision October 2004) 2005 Journal of International Economics, Old version with longer discussion of multiple equilibria
• Endogenous pass-through and Optimal Monetary Policy: A Model of Self-Validating Exchange Rate Regimes with Paolo Pesenti (January 2002-revised September 2004, presented in Atlanta 2002) CEPR wp 8737

Fiscal Policy in Open economy

• Fiscal Stimulus with Spending Reversals, with A Meier and Gernot Mueller, April 2009
• The effectiveness of fiscal policy depends on the financing and monetary policy mix, with Gernot Mueller, www.voxeu.org, November 12 2008
• Twin Deficits, Openness and the Business Cycle , with Gernot Mueller, Journal of European Economic Association 2008
• Twin Deficits: Squaring Theory, Evidence and Common Sense, with Gernot Mueller, Economic Policy October 2006 --- The old version (March 2006) is available here

• What Drives US Foreign Borrowing? Evidence on External Adjustment to Transitory and Permanent Shocks, with Panagiotis Konstantinou, December 2008
• Twin Deficits, Openness and the Business Cycle , with Gernot Mueller, Journal of European Economic Association 2008
• Twin Deficits: Squaring Theory, Evidence and Common Sense, with Gernot Mueller, Economic Policy October 2006 --- The old version (March 2006) is available here
• Chapter on global imbalances in the new EEAG 'Report on the European Economy 2006'.
• Current Account Theory and the Dynamics of US Net Foreign Liabilities with Panagiotis Konstantinou (March 2003-this draft January 2005). Details of this paper are discussed in a long technical appendix to Corsetti-Konstantinou
• Macroeconomic dynamics and the accumulation of net foreign liabilities in the US: an empirical model with Panagiotis Konstantinou (October 2004), Forthcoming in the volume "Dollars, Debt and Deficits: 60 Years After Bretton Woods." IMF

• International Lending of Last Resort and Moral Hazard: a Model of IMF's catalytic finance with Bernardo Guimaraes and Nouriel Roubini (November 2002 -- this draft: March 2005). Journal of Monetary Economics 2006
• Some Contagion, Some Interdependence: More Pittfalls In Tests of Financial Contagion with Marcello Pericoli and Massimo Sbracia,(June 2000- revised March 2002) Journal of International Money and Finance 2005
• The role of large players in currency crises  (with Paolo Pesenti and Nouriel Roubini, presented at the NBER conference on Currency Crises in Emerging Market in January 2001), NBER Working Paper No. W8303 May 2001. In “Preventing currency crises in emerging markets” edited by Edwards and Frenkel, University of Chicago Press.
• Does one Soros make a difference? A Theory of Currency Crises with Large and Small Traders  with Stephen Morris, Hyun Song Shin and Amil Dasgupta (revised July 2000) Cowles Foundation Discussion Paper 1273, and CEPR w.p.. Review of Economic Studies 2004
• Fiscal Imbalances and the Dynamics of Currency Crises with Bartosz Mackowiak, (previously Economic Growth Center at Yale University 2000 and CEPR 2001). European Economic Review 2006
• A fiscal perspective on currency crises and “original sin”, with Bartosz Mackowiak, in Barry Eichengreen and Ricardo Hausmann (eds), "Other People's Money: Debt Denomination and Financial Instability in Emerging Market Economics," Chicago University Press.
• A paper appeared in the Asian Development Review. Interpreting the Asian Financial Crisis: Open Issues in Theory and Policy
• "What Caused the Asian Currency and Financial Crisis?" Japan and the World Economy 11 (3), September 1999, pp.305-373. Also:National Bureau of Economic Research Working Papers 6833 "Part  I : A Macroeconomic  Overview" 6834 "Part  II: The Policy Debate"
• "Shadow Rates and Multiple equilibria in the Theory of Currency Crises" with Lilia Cavallari, Journal of International Economics
•  "Paper Tigers? A Model of the Asian Crisis'', European Economic Review (43)7, 1999. Also National Bureau of Economic Research Working Paper No.6783, 1998.
• "The Asian Crisis: An Overview of the Empirical Evidence and Policy Debate" (with Paolo Pesenti and Nouriel Roubini), forthcoming in Pierre Richard Agenor, Marcus Miller, David Vines and Axel Weber (eds.), Financial Crises: Causes, Contagion and Consequences, Cambridge, U.K.: Cambridge University Press, 1999
• Willem Buiter, Giancarlo Corsetti and Paolo Pesenti, "Interpreting the ERM Crisis: Country-Specific and Systemic Issues", Princeton Studies in International Finance No. 84, February 1998, published by Princeton Studies in International Finance , Princeton University.
• Financial Markets and European Monetary Cooperation. The Lessons of the 1992-93 ERM Crisis (with Willem Buiter and Paolo Pesenti), Cambridge, U.K.: Cambridge University Press, 1998. SANWA MONOGRAPH in international finance. Paperback edition

• A Modern Reconsideration of the Theory of Optimum Currency Areas, prepared for the ECFIN Conference EMU@10, in Brussels, Revision February 2008
• Check out the chapter on the dollar-euro exchange rate in the EEAG report on the European Economy
• Endogenous pass-through and Optimal Monetary Policy: A Model of Self-Validating Exchange Rate Regimes with Paolo Pesenti (January 2002-revised September 2004, presented in Atlanta 2002) CEPR wp 8737
• Annual Report on the European Economy, by the European Economic Advisory Group at CESifo 2002, 2003, 2004, 2005, 2006, 2007. 2008, 2009
• A short piece by Giancarlo Corsetti for Tiaa-cref: Idea Exchange with Barry Eichengreen (Dec 2001): Feeling the Impact of the EuroCurrency
• My "Euro Homepage": eurohomepage.eui.eu
• A paper with Paolo Pesenti for the December 1999 issue of the Brookings Papers on Economic Activity: Stability, Asymmetry and Discontinuity: the Launch of European Monetary Union
• Willem Buiter, Giancarlo Corsetti and Paolo Pesenti, "Interpreting the ERM Crisis: Country-Specific and Systemic Issues", Princeton Studies in International Finance No. 84, February 1998, published by Princeton Studies in International Finance , Princeton University.
• Financial Markets and European Monetary Cooperation. The Lessons of the 1992-93 ERM Crisis (with Willem Buiter and Paolo Pesenti), Cambridge, U.K.: Cambridge University Press, 1998. SANWA MONOGRAPH in international finance. Paperback edition
• The (Past and) Future of European Currencies, with Paolo Pesenti, March 2000, in Cuadernos de Economía

• Since 2001: EEAG Annual Report on the European Economy
• A disturbing déjà vu: the controlled slide in (consensus) forecasts www.voxeu.org, March 2 2009
• The $2 trillion dollar question: How about US demand and output with Panagiotis Konstantinou, www.voxeu.org, February 18 2009
• The effectiveness of fiscal policy depends on the financing and monetary policy mix, with Gernot Mueller, www.voxeu.org, November 12 2008
• The rediscovery of fiscal policy, www.voxeu.org, February 2008
• The anatomy of dollar deprecation www.voxeu.org, November 2007

• Macro 3
• International Economics and Open Macro