Markus Haavio

Markus Haavio
Bank of Finland · Monetary Policy and Research

About

41
Publications
1,318
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208
Citations

Publications

Publications (41)
Article
We study the macroeconomic consequences of a major trade disruption using the example of the Finnish–Soviet trade collapse in 1991. This is a rare case of a well–identified large trade shock in a developed economy. We find that the shock significantly affected Finnish output. Even so, the trade collapse was insufficient to generate an all–out crisi...
Article
Full-text available
Using a wide range of models we document a protracted fall in the natural (or neutral) rate of interest in advanced economies, driven by ageing, waning productivity growth, a rise in mark-ups, and a surge in risk aversion in the wake of the global financial crisis. While our neutral rate estimates are highly uncertain and model dependent, most of t...
Article
This article empirically studies the linkages between financial variable downturns and economic recessions. We present evidence that real asset prices tend to lead real cycles, while loan-to-GDP and loan-to-deposit ratios lag them. Using a probit anaylsis, we document that downturns in real asset prices, particularly real house prices, are useful l...
Article
We develop a dynamic multiregion model, where a household's choice of housing location depends on its current wealth and its current type, and involves both consumption and investment considerations. The relative strength of the consumption motive and the investment motive determines the equilibrium pattern of residential sorting. A strong investme...
Preprint
This paper analyses the transmission of financial shocks to the macroeconomy. The role of macro-financial linkages is investigated from an empirical perspective for the euro area as a whole, for individual euro area member countries and for other EU and OECD countries. The following key economic questions are addressed: 1) Which financial shocks ha...
Preprint
Full-text available
This paper analyses the transmission of financial shocks to the macroeconomy. The role of macro-financial linkages is investigated from an empirical perspective for the euro area as a whole, for individual euro area member countries and for other EU and OECD countries. The following key economic questions are addressed: 1) Which financial shocks ha...
Article
This article empirically studies the linkages between financial variable downturns and economic recessions. We present evidence that real asset prices tend to lead real cycles, while loan-to-GDP and loan-to-deposit ratios lag them. Using a probit anaylsis, we document that downturns in real asset prices, particularly real house prices, are useful l...
Article
We analyze attempts to implement personalized regulation in the form of sin licenses (O’Donoghue and Rabin 2003, 2005, 2007) to correct the distortion in the consumption of a harmful good when consumers suffer from varying degrees of self-control problems. We take into account the possibility that consumers may trade the sin good in a secondary mar...
Article
We develop a dynamic multi-region model, with fluctuating regional house prices, where an owner-occupied household’s location choice depends on its current wealth and its current type and involves both consumption and investment considerations. The relative strength of the consumption motive and the investment motive in the location choice determin...
Article
We analyse the determination of taxes on harmful goods when consumers have self-control problems. We show that under reasonable assumptions, the socially optimal corrective tax exceeds the average distortion caused by self-control problems. Further, we analyse how individuals with self-control problems would vote on taxes on the consumption of harm...
Article
We analyse the determination of taxes on harmful goods when consumers have self-control problems. We show that under mild conditions, the socially optimal tax rate exceeds the average distortion caused by self-control problems. Further, we show that in most cases the tax rate chosen in political equilibrium is below the socially optimal level.
Article
Empirical evidence indicates local jurisdictions are internally more heterogenous than standard sorting models predict. We develop a dynamic multi-region model, with fluctuating regional house prices, where an owner-occupying household's location choice depends on its current wealth and its current "match" and involves both consumption and investme...
Article
Recent research has shown that perfect household mobility can serve as a disciplinary mechanism inducing national policy-makers to internalize interregional externalities caused by transboundary pollution. This paper develops a differential game to illustrate that the result is not necessarily robust when migration costs and explicit dynamics are i...
Article
Full-text available
This paper develops a two-region, three-sector model of economic geography to suggest that the international non-tradability of environmental amenities may generate incentives to abuse environmental policy. In equilibrium both regions convert a suboptimally large share of environmental amenities into tradable natural resources. The aim of strategic...
Article
This paper analyses convergence of unemployment rates in Poland at NUTS4 level by testing nonlinear convergence, applying the modified KSS-CHLL for each pair of territorial units. The results suggest that actually the convergence is a rare phenomenon and occurs only in 1916 cases out of potential over 70 000 combinations. This paper inquires what s...
Article
We develop an infinite horizon multi-region model, with stochastic regional busi-ness cycles and idiosyncratic shocks changing individual agents' match with the current job or technology. We then embed owner-occupation and rental housing markets into this framework, and analyze how these alternative arrangements allo-cate people in space and time....
Article
Recent European data indicate that countries where a large proportion of the population lives in owner-occupied housing are experiencing higher unemployment rates than countries where the majority of people live in private rental housing, which might suggest that rental housing enhances labor mobility. In this paper, we develop a simple intertempor...
Article
Recent European data indicate that countries where a large proportion of the population lives in owner-occupied housing are experiencing higher unemployment rates than countries where the majority of people live in private rental housing, which might suggest that rental housing enhances labor mobility. In this paper, we develop a simple intertempor...
Article
The implications of factor mobility have received an increasing amount of attention in recent years. Markus Haavio's doctoral dissertation focuses on the significance of factor mobility in problems of pollution and environmental policy. The goal of the thesis is to re-examine the principle of subsidiary which states that international cooperation i...
Article
This paper develops a dynamic multi-region model, where (i) an owner-occupying household*s location choice depends on its current wealth and its current match, and (ii) the current wealth depends on the household*s past fortunes in the housing market. In the long-run equilibrium of the model, the size of capital gains and losses, the wealth distrib...
Article
Full-text available
This paper studies how the interaction between environmental policy and household mobility depends on instrument choice, and the ensuing allocation of pollution rents. If the rents are collected by the local public sector, which redistributes them evenly between all residents (also new im- migrants), perfect household mobility provides a remedy to...
Article
Full-text available
This paper develops a dynamic multi-region model, where (i) an owner-occupying household's current location choice depends on its current wealth, and its current "match" (which may reflect the household's demographic characteristics), and (ii) the current wealth depend on the household's past fortunes in the housing market, and its past location ch...
Article
Abstract This paper studies different housing,market,arrangements,in an intertemporal pure consumption economy, consisting of a desirable and an undesirable housing location. Economic,agents are heterogenous,with respect to the utility premium they derive from living in the desirable location. This utility premium, or match, is drawn independently...

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