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Olena Staveley-O'Carroll

Economics and Accounting Department

Assistant Professor
Ph.D., Georgetown University


Fields: Open economy macroeconomics, international capital movements, monetary policy


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Phone: (508) 793-2736
Fax: (508) 793-3710
Office: Stein Hall 540
Box: 227A


Working Papers

Exchange Rate Targeting in the Presence of Foreign Debt Obligations

Joint with James Staveley-O'Carroll
Abstract: We study the impact of foreign debt on the trade-off between the three open economy objectives of a central bank - international risk sharing, the need to facilitate expenditure-switching, and the incentive to tilt international prices to lower the labor effort of domestic households - in a two-country DSGE model with incomplete asset markets and deviations from the purchasing power parity. We find that at low debt levels, a Taylor rule outperforms simple targeting rules. However, the central bank can improve welfare by up to 0.25 percent of consumption via an exchange rate peg when debt-to-GDP ratio reaches 100 percent.

Nonlinearities in the Real Exchange Rates: New Evidence

Joint with Yamin Ahmad and Ming Chien Lo
Abstract: This paper investigates nonlinearities in the dynamics of real exchange rates. First, we use Monte Carlo simulations to establish the size and power properties of the Teräsvirta-Anderson (1992) and the Teräsvirta (1994) test, when the dynamics of the real exchange rate is influenced by exogenous processes. We use the modification proposed by Ahmad, Lo and Mykhaylova (2013) to show that the modified nonlinearity test performs much better than the original in both Monte Carlo exercises and in the actual data on several bilateral real exchange rate series. We then investigate the dynamics of the real exchange rate for both developed and developing countries using the modified test for the recent floating period. In general, the results finds a greater incidence of nonlinear dynamics for developing country real exchange rates.



Exploring International Differences in Inflation Dynamics, joint with Yamin Ahmad. Journal of International Money and Finance (2017), 79, 115-135.

Impact of Pension System Structure on International Financial Capital Allocationjoint with James Staveley-O'Carroll. European Economic Review (2017), 95, 1–22.

Financial Liberalization and International Portfolio Holdings, joint with Pedro de Araujo and James Staveley-O'Carroll. Empirical Economics (2015), 49, 213–234.

Housing Market Dynamics with Delays in the Construction Sector, joint with Berrak Bahadir. Journal of Housing Economics (2014), 26, 94–108.

International Transmission of Productivity Shocks with Nonzero Net Foreign Debt, joint with James Staveley-O'Carroll. The B.E. Journal of Macroeconomics (2014), Vol. 14: Iss. 1 (Contributions), 579–624.

Causes of Nonlinearities in Low-Order Models of the Real Exchange Rate, joint with Yamin Ahmad and Ming Chien Lo. Journal of International Economics (2013), 91, 128–141.

Volatility and Persistence of Simulated DSGE Real Exchange Ratesjoint with Yamin Ahmad and Ming Chien Lo. Economics Letters (2013), 119, 38–41.

Housing Prices and Balance Sheets Effects: A Classroom Demonstration, joint with Shakun Mago and James Staveley-O'Carroll. International Review of Economics Education (2013), 13, 50–66.

Welfare Implications of Regional Asymmetries in a Monetary UnionThe B.E. Journal of Macroeconomics (2011), Vol. 11: Iss. 1 (Topics), Article 39.

New Keynesian Explanations of Cyclical Movements in Aggregate Inflation and Regional Inflation Differentials, joint with Matthew Canzoneri, Behzad Diba, and Robert Cumby. Open Economies Review (2006), 17, 27–55.



Principles of Macroeconomics (Econ 111)

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This course introduces you to the basic concepts of macroeconomics. We start by learning the fundamental principles that economists use to study individual, firm, government, and society choices. We then apply these principles to understand the workings of complex markets and, more importantly, the interconnections that exist between these markets. Finally, we will analyze the objectives and outcomes of government policies used to influence the functioning of the entire macroeconomy.

Macroeconomics (Econ 256)

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This course develops macroeconomic theory; as such it requires the use of economic models. You will develop analytical skills to be able to use the models to understand the U.S. economy. We will examine long-run economic performance (Solow model), business cycles and macroeconomic policy (IS-LM model), and the environments and institutions of macroeconomic policy. We will discuss current economic events and how they affect the economy. The course also contains an introduction to manipulating economic data: you will be asked to use Excel to create graphs and tables that illustrate the data to help relate the data to the theory.

Economics of the European Union (Econ 299)

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The post-World War II period in Europe stands out as a sustained effort in improving economic integration in multiple dimensions. In this course, we will explore various components of this process. The course is divided into several sections examining different aspects of the EU. Following introduction, which looks at the history of European integration and the modern EU institutions, we turn to the discussion of trade and factor movement liberalization, regional policies of the EU (including the common agricultural policy and structural funds), macroeconomic integration and the European Monetary Union, issues of unemployment and welfare, and the future EU widening.

International Finance (Econ 330)

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The twenty-first century is an age of unprecedented globalization, in which countries can no longer ignore the international implications of national policies. This course is devoted to the study of large-scale economic interactions among interdependent economies. We start by learning the principles of national income accounting. Then we turn to asset and goods markets to study exchange rate determination in the short and long run. Bringing these markets together, we build and analyze a short-run model of the open economy. Finally, we use versions of this model to study topics such as international aspects of fiscal and monetary policies, effects of different exchange rate regimes on economic stability, financial crises, and the patterns of cross-border capital flows.