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Fiscal Policy and Financial Depth
Caballero, Ricardo J. - 2004
Most economists and observers place the lack of fiscal discipline at the core of the recent Argentine crisis. This begs the question of how countries like Belgium or Italy (pre-Maastricht) could run large fiscal deficits and accumulate debts far beyond those of Argentina, without experiencing...
Persistent link: https://www.econbiz.de/10012468161
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Fire Sales in a Model of Complexity
Caballero, Ricardo J. - 2009
Financial assets provide return and liquidity services to their holders. However, during severe financial crises many … asset prices plummet, destroying their liquidity provision function at the worst possible time. In this paper we present a … not control or understand. The liquidity of the market quickly vanishes and a financial crisis ensues. The model exhibits …
Persistent link: https://www.econbiz.de/10012463170
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A Dual Liquidity Model for Emerging Markets
Caballero, Ricardo J. - 2002
emerging economy, and those affecting borrowing from foreign lenders. This 'dual liquidity' model offers a parsimonious …
Persistent link: https://www.econbiz.de/10012469957
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On the Global Impact of Risk-off Shocks and Policy-put Frameworks
Caballero, Ricardo J. - 2019
play a key role in benefiting from the spillovers of these policies during risk-off episodes. Countries like Japan, which … already had very low long rates, benefited less. However, Japan still benefitted from the reduced persistence of risk …
Persistent link: https://www.econbiz.de/10012479979
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Inflation Targeting and Sudden Stops
Caballero, Ricardo J. - 2003
Emerging economies experience sudden stops in capital inflows. As we have argued in Caballero and Krishnamurthy (2002), having access to monetary policy during these sudden stops is useful, but mostly for insurance' rather than for aggregate demand reasons. In this environment, a central bank...
Persistent link: https://www.econbiz.de/10012469099
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A Monetary Policy Asset Pricing Model
Caballero, Ricardo J.; Simsek, Alp - National Bureau of Economic Research - 2022
We propose a model where monetary policy is the key determinant of aggregate asset prices (financial conditions). Spending decisions are made by a group of agents ("households") that respond to aggregate asset prices, but with noise, delays, and inertia. Asset pricing is determined by a...
Persistent link: https://www.econbiz.de/10013334351
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Central Banks, Stock Markets, and the Real Economy
Caballero, Ricardo J.; Simsek, Alp - National Bureau of Economic Research - 2024
This article summarizes empirical research on the interaction between monetary policy and asset markets, and reviews our previous theoretical work that captures these interactions. We present a concise model in which monetary policy impacts the aggregate asset price, which in turn influences...
Persistent link: https://www.econbiz.de/10014468253