Why did the volatility of U.S. real GDP decline by more than the volatility of final sales with the Great Moderation in the mid-1980s? One explanation is that firms shifted their inventory behavior towards a greater emphasis on production smoothing. We investigate the role of inventories in the...

This paper outlines institutional arrangements for achieving accelerated self-financed democratic development with investment, consumption, income and savings increasing together instead of relying on a reduction of consumption to create the savings to finance investment or the need to use...

Autonomous demand shock affects consumption spending. Variation in consumption spending contributes to the volatility in aggregate demand. As the investor is risk averse, volatility of aggregate demand reduces investment. Government injects monetary noise to reduce the volatility in aggregate...

The propagation mechanism of monetary shocks in an otherwise standard sticky-price model is examined, modified to incorporate factor hoarding in the form of variable capital utilisation rates and labour effort. In contrast to previous studies, it is found that real effects of monetary shocks can...

This paper focuses on the effects of the Fed's monetary policy on stock and bond returns co-movement and their implications to risk-based asset allocation. Using a regime-switching model that controls for the economic effects of monetary policy we identify three co-movement regimes. We document...

In this paper we analyze the implications of a persistent liquidity trap in a monetary model with asset scarcity. We show that a liquidity trap may lead to an increase in real cash holdings and be associated with a decline in output in the medium term. This medium-term impact is a supply-side...

Using a structural vector autoregression, we document that a contractionary monetary policy shock triggers a decline in durable and non-durable outputs as well as a contraction in bank equity and a rise in the excess bond premium. The latter points to an important transmission channel of...

McKinnon’s complementarity hypothesis articulates that money and physicalcapital complements each other instead of substituting under a repressed financialsector. In spite of various economic and financial reforms in Myanmar, thefinancial sector of Myanmar is lagging behind international...

McKinnon’s complementarity hypothesis articulates that money and physicalcapital complements each other instead of substituting under a repressed financialsector. In spite of various economic and financial reforms in Myanmar, thefinancial sector of Myanmar is lagging behind international...