We present theory and evidence that challenges the view that forward premia contain little information regarding …

Using the sticky price monetary model of exchange rate determination and the sunk cost model of trade hysteresis, we … show that a sufficiently large policy misalignment can induce hysteresis in the trade balance and thereby alter the steady …, policy, and econometric implications. Since hysteresis in our model can entail industrial dislocation and the scrappage of …

accounts). We use survey data on household portfolios for the U.S., Canada, Australia, the U.K., Germany, France, Italy, and …

-recession trend, suggesting hysteresis. Second, while inflation has decreased, it has decreased less than anticipated, suggesting a …