My paper, “Does the Fed control interest rates?” is in the 2013 Review of Asset Pricing Studies (Volume 3, pp. 180-199). The paper finds that the Fed controls the Federal Funds (FF) rate (the overnight rate on interbank borrowing of reserves). Other short-term rates are related to FF, but...

Deviations of policy interest rates from the levels implied by the Taylor rule have been persistent after the turn of the century even before the financial crisis. These deviations could be due to lower real interest rates, as stated by the savings glut hypothesis as well as the apparent success...

The debt ceiling debate could be ended right now given that the US Constitution bestows upon the US Treasury the authority to mint coins. Further, this simple change would lift the veil on how current monetary operations work and thereby demonstrate clearly that a currency-issuing government...

The Federal Reserve has been publishing federal funds rate prescriptions from Taylor rules in its Monetary Policy Report since 2017. The signals from the rules aligned with Fed action on many occasions, but in some cases the Fed opted for a different route. This paper reviews the implications of...

The interest rate channel of monetary transmission is the link through which variations in Central Bank real interest rates influence aggregate output and prices. To check fluctuation in prices, the Central Bank of Nigeria has kept the monetary policy rate stable at 12 percent for the past three...

This study is motivated by the negative HKD-USD interest rate differentials observed after the US interest rate hike on December 17, 2015. We first analyze two practical concerns that are typical from the perspective of a carry trader: (1) the difference in borrowing rate and lending rate of a...