How important is the effect of the interest rate Zero Lower Bound (ZLB) on the severity of the U.S. Great Recession? We tackle this question using an incomplete markets New Keynesian model, with a ZLB on the nominal interest rate and a borrowing constraint tied to asset price. We solve the model...

We examine how medium-term movements in real exchange rates and GDP vary with international financial conditions. For this purpose, we study the international transmission of productivity shocks across a variety of IRBC models that incorporate different assumptions about the persistence of...

We develop a quantitative-oriented model that integrates the production and financing decisions of multinational corporations (MNCs). Firms can deploy their technology for production overseas and become MNCs. Due to frictions in obtaining external finance, the scale of the affiliates partially...