We empirically investigate the relationship between the Japanese general collateral (GC) repurchase agreement (repo) and uncollateralized call rates before, during, and emerging from the recent financial crisis. Unlike the US and many other countries, the Japanese GC repo rate has been higher...

The paper claims that conventional monetary theory obliterates the central role played by media of exchange in the workings and instability of capitalist economies; and that a significant part of the financial system depends on the resiliency of paper currency and liquid assets that have been...

This paper is being prepared for the 2010 international conference of the Institute for Monetary and Economic Studies of the Bank of Japan, gThe Future of Central Banking under Globalization,h to be held May 26-27, 2010, in Tokyo. I am grateful to Marvin Goodfriend for helpful discussions.

In this paper we consider a two-country New Open Economy Macroeconomics model, and analyze the optimal monetary policy when countries cooperate in the face of a "global liquidity trap" -- i.e., a situation where the two countries are simultaneously caught in liquidity traps. The notable features...

An initial version of this paper was presented at a meeting of the Euro50 group in Paris on 20, November, 2009. It has benefitted from comments by David Laidler and Axel Leijonhufvud, neither of whom necessarily agree with all of its contents.

The financial sector is heavily regulated in order to prevent financial crises. The recent crisis showed how ineffective this regulation and other types of government intervention were in achieving this aim. We argue that the crisis was primarily caused by housing price bubbles. These occurred...

An important aspect of the globalization process is the increase in interdependence among countries through the deepening of trade linkages. This process should increase competition in each destination market and change the pricing behavior of firms. We present an extension of Dornbusch (1987)fs...