The recycling problem is general, and is not confined to a multicurrency setting: whenever there are surplus and deficit units — that is, everywhere — adjustment in real terms can be either upward or downward. The question is, Which? An attempt is made to formulate the problem in terms of...

While the mainstream long argued that the central bank could use quantitative constraints as a means to controlling the private creation of money, most economists now recognize that the central bank can only set the overnight interest rate - which has only an indirect impact on the quantity of...

This paper compares central banking in the era of Bagehot's Rule (1873) and the current era of quantitative easing (QE) and zero (or near-zero) interest rate policy (ZIRP) to suggest that our analytical frameworks need updating. It also proposes some rules for emerging-market central banks to...

The main purpose of this study is to explore the potential expansionary effect stemming from the monetization of debt. We develop a simple macroeconomic model with Keynesian features and four sectors: creditor households, debtor households, businesses, and the public sector. We show that such...

This paper investigates the relationship between asset markets and business cycles with regard to the U.S. economy. We consider the Goldman Sachs approach (2003) developed to study the dynamics of financial balances. By means of a small econometric model we find that asset market dynamics are...

This paper traces the evolution of housing finance in the United States from the deregulation of the financial system in the 1970s to the breakdown of the savings and loan industry and the development of GSE (government-sponsored enterprise) securitization and the private financial system. The...