A country's financial system is internationally illiquid if its potential short-term obligations in foreign currency exceed the amount of foreign currency it can have access to in short notice. This condition may be necessary and sufficient for financial crises and/or exchange rate collapses...

We present a simple model that can account for the main features of recent financial crises in emerging markets. The international illiquidity of the domestic financial system is at the center of the problem. Illiquid banks are a necessary and a sufficient condition for financial crises to...

U.S. velocity of base money exhibits three distinct trends since 1950. After rising steadily for thirty years, it flattens out in the 1980s and falls substantially in the 1990s. This paper explores whether the observed secular movements in velocity can be accounted for exclusively by endogenous...

A discussion of the circumstances under which interest rate rules are consistent with nominal determinacy in macroeconomic models.

An examination of a procedure for comparing non-nested models to the problem of choosing an intermediate target for monetary policy. Six models of economic activity, based on six different monetary aggregates, are compared.

This paper presents new evidence on how asset prices respond to new information about the money stock. It shows that the information content of money stock announcements and the response of asset prices to new information in the announcements vary with changes in the monetary policy regime, the...

In this paper, we present a simple random-matching model in which different seasons translate into different propensities to consume and produce. We find that the cyclical creation and destruction of money is beneficial for welfare under a wide variety of circumstances. Our model of seasons can...

A presentation of new evidence on the issue of Federal Reserve System credibility, examining the response pattern of asset prices to the weekly M1 announcements under different operating procedures and monetary policy regimes.

An application of generational accounting to fiscal policies that feature intergenerational redistribution. The authors consider different policies, only some of which show up as a change in the deficit, and explore their impact on the net national saving rate.

A presentation of a set of generational accounts that can be used as an alternative to the federal budget deficit in assessing intergenerational policy, concluding that the fiscal burdens on future generations will be significantly larger than those on existing generations if current tax policy...