This paper introduces an approach to the study of optimal government policy in economies characterized by a coordination problem and multiple equilibria. Such models are often criticized as not being useful for policy analysis because they fail to assign a unique prediction to each possible...

We study how fiscal policies and commuting costs determine the geographical distribution of workers and households in an economy. We characterize equilibrium outcomes in a simple two-region model with commuting costs, local public goods, and local infrastructure. We also provide a short survey...

Adopted in part as a response to the 2007-08 financial crisis, the Basel III accord is the most recent revision to international capital standards for banks. Basel III primarily relies on methods similar to those of Basel II for assessing the relative risks of different types of assets. The main...

The repo market in the United States played a significant role during the 2007–2009 global financial crisis. A large portion of the transactions in this market take the form of a tri-party repo, where a third party (a clearing bank) intermediates between the borrower and the lender. The sudden...

The repo market in the United States played a significant role during the 2007–2009 global financial crisis. A large portion of the transactions in this market take the form of a tri-party repo, where a third party (a clearing bank) intermediates between the borrower and the lender. The sudden...

The instability of money market mutual funds is a subject of active debate. A new regulatory framework is likely to be implemented soon in the United States. The design of such a framework should depend on an assessment of which is the main economic function fulfilled by these funds. If money...