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Real Effects of Stabilizing Private Money Creation

Xu, Chenzi; Yang, He - National Bureau of Economic Research - 2022

We show that decentralized privately created money with unstable values can hinder the traded, more transaction … new federally-regulated, fully-backed currency as an alternative to the pre-existing money supply, which consisted of … this new type of stable, federally-backed money as a natural experiment, we show that places gaining access to the new …

Persistent link: https://www.econbiz.de/10013210088

Money Matters : Broad Divisia Money and the Recovery of Nominal GDP from the COVID-19 Recession

Bordo, Michael D.; Duca, John V. - National Bureau of Economic Research - 2023

The rise of inflation in 2021 and 2022 surprised many macroeconomists who ignored the earlier surge in money growth … regulatory changes and mutual fund costs that affect the substitutability of money for other financial assets. In the short run …The velocity of broad Divisia money temporarily declines during crises like the Great and COVID Recessions, but later …

Persistent link: https://www.econbiz.de/10014322692

Why High Leverage is Optimal for Banks

DeAngelo, Harry - 2013

Liquidity production is a central role of banks. We show that, under idealized conditions, high leverage is optimal for banks when there is a market premium for (socially valuable) liquid financial claims and no deviations from Modigliani and Miller (1958) due to agency problems, deposit...

Persistent link: https://www.econbiz.de/10012459523

The Macroeconomic Expectations of Firms

Candia, Bernardo; Coibion, Olivier; Gorodnichenko, Yuriy - National Bureau of Economic Research - 2022

Using surveys of firms around the world, we review existing evidence on how firms form their macroeconomic expectations. Several facts stand out. First, the mean inflation forecasts of firms often deviate significantly from those of professional forecasters and households. Second, disagreement...

Persistent link: https://www.econbiz.de/10013210070

Asset Demand and Real Interest Rates

Beaudry, Paul; Kartashova, Katya; Meh, Césaire Assah - National Bureau of Economic Research - 2024

Understanding factors that drive asset demand is central to explaining movements in long-term real interest rates. In this paper, we begin by documenting that much of the increase in the demand for assets in the US in the 30 years prior to Covid represented greater desire to hold assets by...

Persistent link: https://www.econbiz.de/10014512102

Estimating the Effects of Political Pressure on the Fed : A Narrative Approach with New Data

Drechsel, Thomas - National Bureau of Economic Research - 2024

This paper combines new data and a narrative approach to identify shocks to political pressure on the Federal Reserve. From archival records, I build a data set of personal interactions between U.S. Presidents and Fed officials between 1933 and 2016. Since personal interactions do not...

Persistent link: https://www.econbiz.de/10014544739

The Inflation Accelerator

Blanco, Andres; Boar, Corina; Jones, Callum; Midrigan, … - National Bureau of Economic Research - 2024

We develop a tractable sticky price model in which the fraction of price changes evolves endogenously over time and, consistent with the evidence, increases with inflation. Because we assume that firms sell multiple products and choose how many, but not which, prices to adjust in any given...

Persistent link: https://www.econbiz.de/10014544808

Back to the 1980s or Not? : The Drivers of Inflation and Real Risks in Treasury Bonds

Pflueger, Carolin E. - National Bureau of Economic Research - 2023

I use nominal and real bond risks as new moments to discipline a New Keynesian asset pricing model, where supply shocks, demand shocks, and monetary policy are the fundamental drivers of inflation. Endogenously time-varying risk premia imply that nominal bond risks--as measured by their stock...

Persistent link: https://www.econbiz.de/10014226118

Liquidity, Debt Denomination, and Currency Dominance

Coppola, Antonio; Krishnamurthy, Arvind; Xu, Chenzi - National Bureau of Economic Research - 2023

We provide a liquidity-based theory for the dominant use of the US dollar as the unit of denomination in global debt contracts. Firms need to trade their revenue streams for the assets required to extinguish their debt obligations. When asset markets are illiquid, as modeled via endogenous...

Persistent link: https://www.econbiz.de/10014226181

It's Baaack : The Surge in Inflation in the 2020s and the Return of the Non-Linear Phillips Curve

Benigno, Pierpaolo; Eggertsson, Gauti B. - National Bureau of Economic Research - 2023

This paper proposes a non-linear New Keynesian Phillips curve (Inv-L NK Phillips Curve) to explain the surge of inflation in the 2020s. Economic slack is measured as firms' job vacancies over the number of unemployed workers. After showing empirical evidence of statistically significant...

Persistent link: https://www.econbiz.de/10014250214