We model systemic risk in an interbank market. Banks face liquidity needs as consumers are uncertain about where they need to consume. Interbank credit lines allow banks to cope with these liquidity shocks while reducing the cost of maintaining reserves. However, the interbank market exposes the...

This Paper is an empirical study of fiscal policy in countries with extreme monetary regimes. We study members of multilateral currency unions, dollarized countries that officially use the money of another country, and countries using currency boards. We find that belonging to an international...

Analysis of our new, 16-year dataset on the Colombian civil war finds under Uribe: guerrilla and paramilitary attacks dropping sharply against long-run averages since 1988, lower for April-December, 2003; government-guerrilla clashes at all-time highs, exceeding guerrilla attacks; civilian killings...

A common feature for developing countries that have experienced a sharp drop in inflation without large output losses is the extensive use of capital controls. This study shows that capital controls significantly improve the sacrifice ratio. This element contributes to the explanation of small...