Structural models with no solution are incoherent, and those with multiple solutions are incomplete. We show that models with occasionally binding constraints are not generically coherent. Coherency requires restrictions on the parameters or on the support of the distribution of the shocks. In...

The report presents new insights and data on stablecoins, an innovative and rapidly evolving sector of the cryptocurrency ecosystem. Stablecoins, as the name suggests, are cryptocurrencies that are designed to minimize price volatility. The findings in this research study build on an earlier...

This paper introduces and examines an intriguing puzzle arising from the market’s persistent tendency to overestimate the trajectory of spot interest rates resulting in lucrative cumulative long-term returns for net zero investments. We introduce a new metric called the “Hairy” premium to...

Cohen, Diether, and Malloy (Journal of Finance, 2007), find that shifts in the demand curve predict negative stock returns. We use their approach to examine changes in supply and demand at the time of FOMC announcements. We show that shifts in the demand for borrowing Treasuries and agencies...

We survey the growing literature emphasizing the role that supply-and-demand forces play in shaping the term structure of interest rates. Our starting point is the Vayanos and Vila (2009, 2021) model of the term structure of default-free bond yields, which we present in both discrete and...

This paper estimates the pass-through of monetary policy rates into five lending rates in Mexico using auto regressive distributed lags models (ARDLs) and taking into account several financial market characteristics. Results show that the pass-through of monetary policy into the average...

In any economy, monetary policy is as essential as fiscal policy in driving growth and in India, it is no different. Our monetary policy is determined by the Reserve Bank of India in consultation with Monetary Policy Committee which is headed by the RBI Governor while Fiscal Policy is determined...

The presence of an occasionally binding constraint due to the zero lower bound (ZLB) in New Keynesian models generally gives rise to multiple equilibria under active Taylor Rules. In order to restore model coherency with active Taylor Rules, we consider appropriate simple fiscal policy...

In the past, the Federal Open Market Committee (FOMC) has been able to bring down inflation through contractionary monetary policy only at the cost of recession. Despite this history, in their comments on current policy, FOMC participants do not draw lessons from that experience. There is no...