Countries face an ongoing need for fiscal adjustment and economic reform - adjustment and reforms that involve short-term transition costs. Thus economic agents, depending on their time preference for present consumption ...

In this paper we derive a model of aggregate investment that builds from the lumpymicroeconomic behavior of firms facing stochastic fixed adjustment costs. Instead of theŽ.standard sharp S, s bands, firms’ adjustment ...

We extend the macroeconomic literature on Sstype rules by introducing infrequent information in a kinked ad justment cost model. We first show that optimal individual decision rules are both state-and -time dependent. We ...

When export opportunities arise, the gains from trade can only be materialized if the economy adjusts. In order to expand and meet new markets, firms must hire new workers and tune their capital stock by investing in product ...

This paper proposes a model to study how conditional lending and immediate liquidity provision affect incentives for fiscal adjustment in a country facing the risk of sovereign default. Conditional lending provides explicit ...

The calculations are based on the paper “O Custo do Atraso no Equacionamento da Questão Fiscal “, to be published in 2017 in the “Revista Economia Política”, and may be obtained at https://epge.fgv.br/users/rubens/working-papers/ ...