This paper incorporates a financial accelerator mechanism in a small open economy macro model with money and nominal price rigidities. Our goal is to explore the connection between financial distress that feeds into the real economy and the exchange rate regime. Our principle finding is that financial accelerator effects are much stronger under fixed rates than under flexible rates (with a suitably managed monetary policy). Roughly speaking, an exchange rate peg forces the central bank to adjust the interest rate in a manner that enhances the financial distress. This occurs even when debt is denominated in units of foreign currency. Finally, unexpectedly delaying the abandoment of an exchange rate peg several quarters after a shock can produce distress nearly as bad as occurs under a permanent peg, due to the unanticipated contractions in asset prices.

which seeks to offer critical thinking on the most relevant economic and social policies in Canada and around the world. In particular, the institute‘s mission is to explore themes related to macroeconomic policies, globalization and development issues, and income distribution and employment policies. Our overall concern is with the social and economic dignity of the human being and his/her role within the larger global community. We believe that everyone has a right to decent work, to a fair and equitable income and to equal opportunities to pursue one‘s self-fulfillment. We strongly believe that it is the role of policies and institutions to guarantee these rights. In accordance with its mission, the Institute is constantly seeking to create international research networks by hosting conferences and seminars and inviting other thinkers around the globe to reflect on crucial

drastically over time, from eviction to empowering them in forest management. Attempts to formulate people-oriented forest policies have been made since the 1970s, however, most of these have not realized the anticipated results. A major external constraint on participatory forest management appears

international actions exert a major influence not only on the external conditions facing Africa, but also on domestic policies through aid conditionality and stabilisation and adjustment programmes. Thus the external and internal constraints of African economies cannot be usefully disentangled. The structural

A snake is an energy-minimizing spline guided by external constraint forces and influenced by image forces that pull it toward features such as lines and edges. Snakes are active contour models: they lock onto nearby edges, localizing them accurately. Scale-space continuation can be used to enlarge

The theoretical framework presented in this article explains expert performance as the end result of individuals ' prolonged efforts to improve performance while negotiating motivational and external constraints. In most domains of expertise, individuals begin in their childhood a regimen

intermediaries and markets matter for growth and that reverse causality alone is not driving this relationship. Furthermore, theory and evidence imply that better developed financial systems ease external financing constraints facing firms, which illuminates one mechanism through which financial development

this paper. First and foremost should be mentioned Peter Sells and Masayo Iida upon whose work this paper builds. I have also received advice and comments (relating to data or linguistic analyses, though generally the latter) from Lynn Cherny, Hye-won Choi, Mary Dalrymple, Yookyung Kim, Yoshiko Matsumoto, Shigeru Miyagawa, Bill Poser, Yoshiko Sheard and Shuichi Yatabe. My email address is manning@csli.stanford.edu.

different exchange rate regimes. In my view the paper is an important step forward in the emerging literature on credit constraints in open economies. Early contribution to this literature was made by Gertler and Rogoff (1990), but this was a real two-period model. Aghion, Bacchetta, and Banerjee (1999

More than ever before financial factors are shaping the business cycle. This is true not only in those countries struggling to come to grips with recently liberalised financial systems, but also in those that have had a couple of decades to adapt. Around the globe, we have seen balance sheets expand more quickly than GDP and levels of debt rise more quickly than income. And as a result, today, economic fluctuations are more likely to have their roots in financial factors than in any other factor. All this is forcing us to rethink how the world works. First, private-sector spending is becoming more sensitive to changes in asset prices and, possibly, interest rates. Second, the macroeconomy seems more susceptible to asset price misalignments and associated misperceptions of risk. And third, we have come to realise that changes in the structure of balance sheets can act as a powerful accelerator to the business cycle. It is this third dimension of this changing world that the paper by Gertler et al addresses. Over the past decade the first two authors have been instrumental in giving us the tools to model and analyse the effects of debt and asset prices on the evolution of the business cycle. Their basic line of reasoning is well known but let me repeat it