Pablo Garcia Sanchez

TL;DR: In this paper, the authors explore different business ventures in low-income markets in order to understand the factors influencing business model innovation in this context, and identify a set of contingency factors that permitted them to distinguish between isolated and interactive business models.

TL;DR: In this paper, a simple Real Business Cycle model with financial intermediaries that may default on their liabilities and a financial friction generating social costs of default is proposed, and a closed-form solution for the general equilibrium of the economy is derived.

TL;DR: In this article, the authors augment a simple Real Business Cycle model with financial intermediaries that may default on their liabilities and a financial friction generating social costs of default, and provide a closed-form solution for the general equilibrium of the economy under specific assumptions.

Abstract: We augment the original LU-EAGLE model with disaggregated public expenditure, allowing for (i) a distinction between public consumption and investment expenditures, (ii) complementarity between public and private consumption, (iii) a productive role for public capital, and (iv) separate private and public employment. This extended model embeds a wide range of transmission channels from public expenditures and allows for a detailed analysis of the general-equilibrium effects of public demand in Luxembourg. Model simulations suggest that a rise in public employment induces the strongest GDP response in the short run, while a rise in public investment has the largest effects in the long run. The results also indicate that crowding-out effects through changes in net exports are essential in determining fiscal multipliers for small open economies such as Luxembourg.

TL;DR: In this paper, the authors investigate the impact of fiscal policy on economic activity and sovereign debt during economic downturns in the euro area, mainly Germany and Spain, and show that counter cyclical policies beat deficit consolidation policies in driving the sovereign debt ratio to a more sustainable path.