We consider the optimality of various institutional arrangements for agencies that conduct macro-prudential regulation and monetary policy. When a central bank is in charge of price and financial stability, a new time inconsistency problem may arise. Ex-ante, the central bank chooses the...

This paper studies the long-run relationship between consumption, asset wealth and income - the consumption-wealth ratio - in Germany, based on data from 1980 to 2003. Earlier papers for the Anglo-Saxon economies have documented that departures of these three variables from their common trend...

We investigate the cyclicality of the private savings to GDP ratio for a panel of 19 OECD countries over the period 1971-2009. We find robust evidence that the private savings ratio is countercyclical. Three theories unambiguously predict a higher private savings ratio during recessions: a...

Motivated by the apparent failure of the credit multiplier mechanism (CM) to deliver amplification in DSGE models, we re-examine its role in business cycles to address the question: is something wrong with the CM? Our answer is no. In coming to this answer we construct a model with reproducible...

This paper studies the effect of two labor market institutions, unemployment insurance (UI) and job search assistance (JSA), on the output cost and welfare cost of recessions. The paper develops a tractable incomplete-market model with search unemployment, skill depreciation during unemployment,...

This paper presents new evidence on the behavior of saving in the world, by extending previous empirical research in five dimensions. First, it is based on a very large and recent database, covering 165 countries from 1981 to 2012. Second, it conducts a robustness analysis across different...

We confirm the negative relationship between household debt and future GDP growth documented in Mian, Sufi, and Verner (2017) for a wider set of countries over the period 1950-2016. Three mutually reinforcing mechanisms help explain this relationship. First, debt overhang impairs household...

Using a broad set of macroeconomic country characteristics to supplement a new and comprehensive micro-level dataset for 140 countries, we identify structural factors, policies, and individual characteristics that are associated with financial inclusion-in general, and for women in particular....

Not anytime soon. Using a novel dataset covering 127 countries and spanning two centuries, we find evidence for an energy Kuznets curve, with an initial decline of energy demand at low levels of per capita income followed by stages of acceleration and then saturation at high-income levels....

We study a model of equilibrium sovereign default in which the government issues cocos (contingent convertible bonds) that stipulate a suspension of debt payments when the government faces liquidity shocks in the form of an increase of the bondholders' risk aversion. We find that in spite of...