Essays on applied macroeconomics and monetary policy

Abstract

The dissertation presents three essays in applied macroeconomics and monetary theory. First essay explores the existence of global financial cycles and examines the relationship between financial and macroeconomic sectors at a global scale. I find that there exist significant cycles in financial variables and the contribution of the financial shocks on global macroeconomic sector is significant and varying over time. Second essay examines the role of decentralization on regional convergence using night-time satellite lights data as proxy for regional economic activities. I find that the decentralization hinders regional convergence in the sample of developing countries. Third essay analyzes active and passive fiscal and monetary policy regime in the presence of long and short-maturity government debt. I utilize the advances made in money search model to analyze the policy regimes. I find that while there are some similarities between the regime, there are also significant differences. I also find that the results using money-search model can be different than using a reduced form models.