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Amador, Manuel; Bianchi, Javier - National Bureau of Economic Research - 2023

drops can be a useful stabilization tool during a liquidity trap. With commitment, even with balance sheet constraints …

Persistent link: https://www.econbiz.de/10014247967

Sovereign Debt

Eaton, Jonathan - 1995

We review the literature on sovereign debt. We organize our survey around three central questions: (1) Why do sovereign debtors ever repay their debts? (2) What burdens, in the form of distortions and inefficiencies, does sovereign debt impose? and (3) How might debt be restructured to reduce...

Persistent link: https://www.econbiz.de/10012473755

Quantitative Sovereign Default Models and the European Debt Crisis

Bocola, Luigi - 2018

A large literature has developed quantitative versions of the Eaton and Gersovitz (1981) model to analyze default episodes on external debt. In this paper, we study whether the same framework can be applied to the analysis of debt crises in which domestic public debt plays a prominent role. We...

Persistent link: https://www.econbiz.de/10012480634

Monetary Independence and Rollover Crises

Bianchi, Javier - 2018

a severe recession in the event of a liquidity crisis, and are therefore more prone to run on government bonds. In a …

Persistent link: https://www.econbiz.de/10012480991

Inflation Past, Present and Future : Fiscal Shocks, Fed Response, and Fiscal Limits

Cochrane, John H. - National Bureau of Economic Research - 2022

Our current inflation stemmed from a fiscal shock. The Fed is slow to react. Why? Will the Fed's slow reaction spur more inflation? I write a simple model that encompasses the Fed's mild projections and its slow reaction, and traditional views that inflation will surge without swift rate rises....

Persistent link: https://www.econbiz.de/10013210124

Fiscal Histories

Cochrane, John H. - National Bureau of Economic Research - 2022

The fiscal theory states that inflation adjusts so that the real value of government debt equals the present value of real primary surpluses. Monetary policy remains important. The central bank can set an interest rate target, which determines the path of expected inflation, while news about the...

Persistent link: https://www.econbiz.de/10013361983

Quantifying the Costs and Benefits of Quantitative Easing

Levin, Andrew T.; Lu, Brian L.; Nelson, William R. - National Bureau of Economic Research - 2022

We conduct a systematic analysis of the costs and benefits of large-scale securities purchases, using the Federal Reserve's QE4 program as a concrete example. This program was initiated at the onset of the pandemic in March 2020 and continued for two years, leading to a doubling of the Fed's...

Persistent link: https://www.econbiz.de/10013477241

Fiscal Consequences of Central Bank Losses

Cecchetti, Stephen G.; Hilscher, Jens - National Bureau of Economic Research - 2024

In response to the Global Financial Crisis, central banks engaged in large-scale asset purchases funded by the issuance of reserves. These "unconventional" policies continued during the pandemic, so that by 2022 central banks' balance sheets had grown up to ten-fold. As a result of rapidly...

Persistent link: https://www.econbiz.de/10014544756

Monetary Policy Wedges and the Long-term Liabilities of Households and Firms

Binsbergen, Jules H. van; Grotteria, Marco - National Bureau of Economic Research - 2024

We examine the transmission of monetary policy shocks to the long-duration liabilities of households and firms using high-frequency variation in 10-year swap rates around FOMC announcements. We find that four weeks after the announcement mortgage rates move one-for-one with 10-year swap rates,...

Persistent link: https://www.econbiz.de/10014486229

Liquidity and Exchange Rates : An Empirical Investigation

Engel, Charles - 2018

important innovation is that we include the liquidity yield on government bonds as an explanatory variable. We find impressive … evidence that changes in the liquidity yield are significant in explaining exchange rate changes for all of the G10 countries …. Moreover, after controlling for liquidity yields, traditional determinants of exchange rates - adjustment toward purchasing …

Persistent link: https://www.econbiz.de/10012481044

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