The relatively infrequent nature of major credit distress events makes a historical approach particularly useful. Using a combination of historical narrative and econometric techniques, we identify major periods of credit distress from 1875 to 2007, examine the extent to which credit distress...

The monetary control literature has attempted to explore the effects of alternative policies without succeeding in incorporating rational expectations or in integrating analysis of the money supply sector into a complete macroeconomic framework. the rational expectations approach, while...

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

An investigation of the ways in which rational expectations theory fundamentally changes monetary policy analysis and an attempt to generalize the implications of such analysis.

Do steep recoveries follow deep recessions? Does it matter if a credit crunch or banking panic accompanies the recession? Moreover, does it matter if the recession is associated with a housing bust? We look at the American historical experience in an attempt to answer these questions. The...

This paper brings historical evidence to bear on the stylized fact that the yield curve predicts future growth. The spread between corporate bonds and commercial paper reliably predicts future growth over the period 1875-1997. This predictability varies over time, however, particularly across...

Considering time inconsistency as a problem of irreversible investment brings some neglected points to the fore. Making a policy choice in real time and under current conditions emphasizes the importance of the timing of commitment, the regret over past decisions, and the option value of not...

A reconsideration of the role of monetary policy in a multiperiod sticky-wage model that incorporates rational expectations and displays the natural rate property.

We revisit classic questions concerning the effects of money on investment in a new framework: a two-sector model where some trade occurs in centralized and some in decentralized markets, as in recent monetary theory, but extended to include capital. This allows us to incorporate novel elements...

An examination of the dynamics of commitment, showing that because the decision regarding rules versus discretion occurs in real time, opting for discretion is often the better choice, since it leaves open the possibility of adopting rules later on.