In the last few years in the U.S. and especially since the publication of Stephanie Kelton’s book, The Deficit Myth (Kelton, 2020) in Europe, the so-called Modern Monetary Theory (MMT) has been gaining prominence in the media and the public. This paper exposes the main proposals of MMT in the...

In this paper, we analyse the effects of transitory fiscal expansions when public debt is used as liquidity by the private sector. Aggregate shocks are introduced into a tractable flexible-price, incomplete-market economy where heterogenous, infinitely-lived agents face occasionally binding...

The role of uncertainty in the global economy is now widely recognized by policy-makers but its effects on the international financial system are less understood. In this paper we assess the impact of uncertainty fluctuations on the interconnectedness within the international system of equity...

The recent weakness in business investment among advanced economies has revived interest in investment models and opened a debate on the main drivers of the "investment slump" and what the policy response should be – if any. In particular, it is essential to assess precisely whether the...

We use the term structure of disagreement of professional forecasters to document a novel set of facts: (1) forecasters disagree at all horizons, including the long run; (2) the term structure of disagreement differs markedly across variables: it is downward sloping for real output growth,...