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Author:Veracierto, Marcelo 

Discussion Paper
Plant level irreversible investment and equilibrium business cycles
This paper studies a version of the neoclassical growth model where heterogeneous establishments are subject to partial irreversibilities in investment. Under such investment technology, the optimal decision rules of establishments are of the (S,s) variety. A novel contribution of the paper is the analysis of the general equilibrium dynamics arising from aggregate productivity shocks. This is a difficult task given the high dimensionality of the state vector, which includes the distribution of establishments across capital levels and idiosyncratic shocks. The paper overcomes this difficulty by developing a suitable computational approach. The model is used to study the importance of investment irreversibilities for macroeconomic dynamics. It is found that investment irreversibilities have no major implications for aggregate fluctuations, even though they are crucial for establishment level dynamics. This result contradicts previous conclusions in the literature which rely on partial equilibrium analysis.
AUTHORS: Veracierto, Marcelo
DATE: 1997

Journal Article
The aggregate effects of advance notice requirements
This article analyzes the effects of advance notice requirements on aggregate output, wages, employment, and welfare levels. The author finds that, contrary to firing taxes, advance notice requirements do not lead to reduction in employment. However, they can reduce welfare levels considerably more than firing taxes.
AUTHORS: Veracierto, Marcelo
DATE: 2002-01

Journal Article
A Monetarist View of the Fed’s Balance Sheet Normalization Period
The Federal Reserve currently holds over $4 trillion in fixed-income assets. However, since the fall of 2017 the Fed has been in a ?balance sheet normalization period,? during which the size of its balance sheet is gradually shrinking over time. In particular, the Federal Open Market Committee (FOMC) has been instructing the Federal Reserve trading desk to reduce its security holdings by reinvesting principal payments only to the extent that these payments exceed gradually raising caps. These caps on redemptions will be maintained until the Fed considers that its balance sheet has reached a desirable size.
AUTHORS: Veracierto, Marcelo
DATE: 2018

Journal Article
Dollarization in Argentina
Several countries are seriously considering the abandonment of their currency and its formal replacement with the U.S. dollar. Since 1991, Argentina has backed its currency with 100 percent reserves and successfully pegged it to the dollar. In doing so, it has already grappled with many issues that confront would-be adopters of the dollar. Moving to full-fledged dollarization might offer a solution to recurring crises that are partly driven by expectations that Argentina might abandon its peg.
AUTHORS: Velde, Francois R.; Veracierto, Marcelo
DATE: 2000-01

Journal Article
Preannounced tax cuts and their potential influence on the 2001 recession
The authors present a model in which anticipated future tax cuts, like those promised during the 2000 U.S. presidential campaign, generate a contraction in economic activity with some of the atypical features observed during the 2001 recession (such as its relatively strong consumption and home investment).
AUTHORS: Butters, R. Andrew; Veracierto, Marcelo
DATE: 2009-07

Journal Article
Seasonal monetary policy
AUTHORS: Veracierto, Marcelo
DATE: 2005-07

Journal Article
Worker flows and matching efficiency
Although job vacancies have increased quite significantly since mid-2009, the unemployment rate has not declined significantly. This article analyzes the matching efficiency of jobs and workers in U.S. labor markets and its impact on the behavior of the unemployment rate and other labor market outcomes since the start of the latest recession.
AUTHORS: Veracierto, Marcelo
DATE: 2011-10

Journal Article
A Simple Model of Gross Worker Flows across Labor Market States
The author develops a simple model of the gross flows of workers across labor market states that is based on Krusell et al. (2012). Its simplicity allows for analytical derivations that make the determination of these flows transparent. Moreover, he finds that if errors in the classification of agents? labor market states are introduced and allowed to vary over time, the model has the ability to generate business cycle dynamics similar to those observed in the U.S. data. However, its dynamics are driven essentially by exogenous factors, not endogenous ones.
AUTHORS: Veracierto, Marcelo
DATE: 2015-04

Journal Article
Corruption and innovation
In this article, the author illustrates how corruption can affect an industry's rate of innovation. An interesting result of analysis is that, under certain parameter ranges, small increases in the penalties to corruption or the effectiveness of detection can result in large increases in product innovation.
AUTHORS: Veracierto, Marcelo
DATE: 2008-01

Dollarization in Argentina
AUTHORS: Veracierto, Marcelo; Velde, Francois R.
DATE: 1999-06


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