Measured aggregate U.S. consumption does not behave like a martingale. This paper develops and tests two variants of the permanent income model that are consistent with this fact. In both variants, we assume agents make decisions on a continuous time basis. According to the first variant, the...

Exogenous shocks to monetary policy strongly affect short-term interest rates, but have little or no effect on longer-term interest rates.

This article examines the growing dependence of global financial markets on time-critical liquidity in managing settlement risk and its implications for financial regulation.

Financial market utilities ensure that clearing, settlement, and payments operations go smoothly. This article explores how these systems mitigate settlement risk, using precisely targeted “just-in-time” liquidity, and discusses the risks for financial stability implied by the increasing...

This research aims to present a value-based, consumer-centric view of convenience retailer innovativeness. It draws on focus groups undertaken with convenience store consumers in Taiwan. The results show that consumers evaluate the innovativeness of a convenience retailer through not only novel...

Systemic crises, such as the recent Asian crisis, may be due to an inability of individual to optimally coordinate their investment strategies.

The Federal Reserve currently conducts open market operations primarily in Treasury securities. It has not always done so. In its earliest years, the Fed conducted open market operations primarily in private securities, such as bankers' acceptances. The Fed's choice of instruments was based both...