We develop a general policy analysis framework for an open economy that features nominal rigidities and financial frictions giving rise to endogenous PPP and UIP deviations. The efficient allocation can be implemented with monetary policy closing the output gap and FX interventions eliminating...

We show diverse beliefs is an important propagation mechanism of fluctuations, money non neutrality and efficacy of monetary policy. Since expectations affect demand, our theory shows economic fluctuations are mostly driven by varying demand not supply shocks. Using a competitive model with...

This paper revisits the effectiveness of Chinese monetary policy from augments concerning rational expectations. To estimate the dynamics of expectations, we incorporate market regime switching into the estimation of the rational expectations element using a recursive solution method. When...

China's recent monetary stimulation has substantially boosted economic. We argue that its efficacy derives from state control over its banking and corporate sectors. Beijing ordered state-owned banks to lend, and they lent. Beijing ordered centrally-controlled state-owned enterprises (SOEs) to...

I develop a quantitative model of the mortgage market operating in an economy with financial frictions and nominal rigidities. I use this model to study the effectiveness of large-scale asset purchases (LSAPs) by a central bank as a tool of monetary policy. When negative shocks hit, homeowner...

This paper aims to survey the existing literature on the relationship between banking and space. Many studies have documented disparities in the regional responses to monetary policy shocks. Given the fact that monetary policy affects some regions of the country more than others, a review of the...

This paper examines the heterogeneous effects of unconventional monetary pol icy on housing default and foreclosure across subprime and prime regions. Using both daily and monthly data and various identification schemes, we find that expansionary unconventional monetary policy shocks reduce...

Hong Kong's inflation is heavily influenced by the development in the property market, as property prices can affect the CPI through the CPI rental component, rental cost effect on service fees and charges, and the wealth effect on aggregate demand. Therefore, the deployment of countercyclical...

We study how employment documentation requirements and out-of-pocket closing costs constrain mortgage refinancing. These frictions, which bind most severely during recessions, may significantly inhibit monetary policy pass-through. To study their effects on refinancing, we exploit an FHA policy...

This study investigates whether the unprecedented liquidity injected in the economy by the U.S Fed through unconventional monetary policy measure, popularly known as quantitative easing (QE), is a systematic factor that can explain the abnormally low U.S. housing starts of recent years. We use...