Abstract

This thesis studies challenges for modern developed economies, including the structural change toward services, population ageing, weak labor mobility in the EMU and unconventional monetary policies after the 2008 financial crisis. The manuscript is divided into four chapters. In the first chapter, we analyze the interaction between interbank markets and default risk using a two-country dynamic general equilibrium model, with a focus on the transmission of the recent financial crisis and unconventional monetary policies. In the second chapter, we investigate the effects of fiscal devaluations on key macroeconomic aggregates and welfare using a two-country monetary-union model with endogenous varieties and endogenous tradability. In the third chapter, we study the impact of demographic factor and the growth of service sector by using a multi-sectoral OLG model, and effectuate counterfactual experiments in which the annual growth rate of young generation is ±1pp than the actual growth rate. In the fourth chapter, we study the potential interactions between financial integration and labor mobility in a currency union facing asymmetric shocks, and simulate the impacts of 2008 financial crisis under different mobility costs.