Exogenous shocks to monetary policy strongly affect short-term interest rates, but have little or no effect on longer-term interest rates.

The equilibrium real interest rate represents the real rate of return required to keep the economy’s output equal to potential output. This article discusses how to measure the equilibrium real interest rate, using an empirical structural model of the economy.

The optimal inflation tax is computed in monetary models where money is costly to supply. The models are simple general equilibrium models with money in the utility function or a transactions technology. The inflation tax is a means of raising taxes to finance exogenous government expenditures....

This article describes and defends the authors' corrections to the federal government's flawed measure of its cost of funds. Further, it examines how the maturity structure of the debt influences the way inflation risk and interest rate risk are shared by the government and its creditors.

This article studies the relation between IPO investment and the rate of interest. The 1950s and early 1960s, especially, were periods of very low real interest rates, and IPO investment was very low, with firms delaying their IPOs significantly. The authors find a qualitative difference between...

This article examines the major differences in the accounting and stock market characteristics of banking organizations that use derivatives relative to those that do not.