Johann Wolfgang Goethe University, Germany
IZA World of Labor role
Author
Current position
Professor, Johann Wolfgang Goethe University Frankfurt, Germany
Research interest
Monetary and fiscal policy, banking and regulation, labor market frictions
Positions/functions as a policy advisor
Consultant European Central Bank (DG-ECON), European Commission (DG-ECFIN).
Past positions
Assistant Professor, University of Rome Tor Vergata, Italy (2006–2008); Assistant Professor, Universitat Pompeu Fabra, Italy (2002–2006)
Qualifications
PhD Economics, New York University, 2002
Selected publications
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“Sovereign risk, bank funding and investors pessimism.” Journal of Economic Dynamics and Control 79 (2017): 79–96.
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"Exit strategies." European Economic Review 70 (2014): 231–257 (with I. Angeloni and R. Winkler).
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"Capital regulation and monetary policy with fragile banks." Journal of Monetary Economics 60:3 (2013): 311–382 (with I. Angeloni).
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"Ramsey monetary policy with labor market frictions." Journal of Monetary Economics 56:4 (2009): 570–581.
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"Finance and international business cycle." Journal of Monetary Economics 54:4 (2007): 1018–1034.
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Competitiveness, labor market institutions, and monetary policy
Monetary policy should respond to the exchange rate in countries where labor market institutions hinder wage adjustment
Ester Faia, August 2017In the presence of rigid prices, movements in the exchange rate help to absorb external shocks and to reduce changes in net exports. However, they also affect firms’ competitiveness, marginal costs, and labor demand. In countries where labor market institutions hinder wage adjustment (for example due to high union density or more rigid collective bargaining agreements), firms are less competitive: labor demand is then more sensitive to external shocks, increasing the risk of unemployment.MoreLess