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Asset Prices and Aggregate Demand in a "Covid-19" Shock : A model of Endogenous Risk Intolerance and LSAPs
Caballero, Ricardo J. - 2020
a large (non-financial) shock; and (ii) demonstrate the effectiveness of Large Scale Asset Purchases (LSAPs) in … addressing these contractions. The key mechanism stems from heterogeneous risk tolerance: as a recessionary shock hits the … Covid-19 shock and the large response by all the major central banks provide a vivid illustration of the environment we seek …
Persistent link: https://www.econbiz.de/10012836868
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Missing aggregate dynamics : on the slow convergence of lumpy adjustment models
Berger, David; Caballero, Ricardo J.; Engel, Eduardo - 2015
Persistent link: https://www.econbiz.de/10011577984
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Missing aggregate dynamics : on the slow convergence of lumpy adjustment models
Berger, David; Caballero, Ricardo J.; Engel, Eduardo - 2017
Persistent link: https://www.econbiz.de/10011776554
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A monetary policy asset pricing model
Caballero, Ricardo J.; Simsek, Alp - 2023
Persistent link: https://www.econbiz.de/10014331559
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Crisis and Reform: Managing Systemic Risk
Caballero, Ricardo J. - In: Rivista di Politica Economica 99 (2009) 4, pp. 9-64
«Everything which involves turbulence is enormously more complicated, not just a little bit more complicated, not just one year more schooling, just enormously more complicated». (Mandelbrot interview with PBS News Hour, October 21th, 2008 by SOLMAN P.)
Persistent link: https://www.econbiz.de/10010575254
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A risk-centric model of demand recessions and macroprudential policy
Caballero, Ricardo J.; Simsek, Alp - 2017 - This draft: July 14, 2017
demand. In the recession phase, average beliefs matter not only because they a¤ect asset valuations but also because they …-valuation investors' wealth when the economy transitions to recession, which depresses (wealth-weighted) average beliefs. Macroprudential …
Persistent link: https://www.econbiz.de/10011689630
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Prudential Monetary Policy
Caballero, Ricardo J. - 2020
Should monetary policymakers raise interest rates during a boom to rein in financial excesses? We theoretically investigate this question using an aggregate demand model with asset price booms and financial speculation. In our model, monetary policy affects financial stability through its impact...
Persistent link: https://www.econbiz.de/10012849256
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A Risk-Centric Model of Demand Recessions and Macroprudential Policy
Caballero, Ricardo J. - 2019
We theoretically analyze the interactions between asset prices, nancial speculation, and macroeconomic outcomes when output is determined by aggregate demand. If the interest rate is constrained, a rise in the risk premium lowers asset prices and generates a demand recession. This reduces...
Persistent link: https://www.econbiz.de/10012898808
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Emerging Markets Crisis An Asset Markets Perspective
Caballero, Ricardo J. - 2006
The entire difference between a mild downturn and a devastating crisis is the occurrence of sharp fire sales of domestic assets and possibly foreign exchange and the ensuing collapse in the balance sheets of both the financial and nonfinancial sector. Why and how do such crises materialize? And...
Persistent link: https://www.econbiz.de/10012782571
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Monetary Policy with Opinionated Markets
Caballero, Ricardo J.; Simsek, Alp - 2021
Central banks (the Fed) and markets (the market) often disagree about the path of interest rates. We develop a model where these different views stem from disagreements between the Fed and the market about future aggregate demand. We then study the implications of these disagreements for...
Persistent link: https://www.econbiz.de/10013246804