A review of major lines of thinking about developments in the 1980s bearing on the likelihood of a financial crisis in the United States supports four principal conclusions:First, financial crises have historically played a major role in large fluctuations in business activity. A financial...

Central banks no longer set the short-term interest rates that they use for monetary policy purposes by manipulating the supply of banking system reserves, as in conventional economics textbooks; today this process involves little or no variation in the supply of central bank liabilities. In...

I argue in this paper that one of the two forms of hitherto unconventional monetary policy that many central banks have implemented in response to the 2007 financial crisis - large-scale asset purchases, or to put the matter more generically, use of the central bank's balance sheet as a distinct...

The object of this paper is to test several familiar hypotheses about the relationship between the forward rates implied by the term structure and interest rate expectations, using the one ongoing systematic survey that samples market participants' expectations. The substitution of survey data...

The influence of monetary policy over interest rates, and via interest rates over nonfinancial economic activity, stems from the central bank's role as a monopolist over the supply of bank reserves. Several trends already visible in the financial markets of many countries today threaten to...

Is credit as closely related to income as is money? Results presented in the first half of this paper, based on a variety of methodological approaches, consistently indicate that the aggregate of outstanding credit liabilities of all nonfinancial borrowers in the United States bears as close a...

Stock and Watson's widely noted finding that money has statistically significant marginal predictive power with respect to real output (as measured by industrial production), even in a sample extending through 1985 and even in the presence of a short-term interest rate, is not robust to two...

Three specific aspects of the corporate financing decision - internal versus external funds, equity versus debt within the external component, and features of the debt including especially maturity - present opportunities (and pitfalls) for public policy for affecting U.S. capital formation....

The experience of U.S. monetary policy during 1979-82 provided useful and potentially important new evidence about how monetary policy affects economic activity. This paper considers, inthe light of that evidence, six familiar propositions supporting the use of monetary aggregate targets for...

Major changes have taken place in the U.S. economy within the past quarter century. Changes with implications that are at least potentially important for the effect of monetary policy on real economic activity include the elimination of Regulation Q interest ceilings and the development of the...