We show that an increase in banks' holdings of domestic Sovereign debt decreases the ability of domestic Sovereigns to successfully enact bailouts. When Sovereigns finance bailouts with newly issued debt and the price of Sovereign debt is sensitive to unanticipated debt issues, then bailouts...

While the renegotiation of the North American Free Trade Agreement has received far more attention, a lesser-known U.S. trade deal has also been reworked. In April of 2017, President Trump proclaimed his displeasure with the Korea-U.S. Free Trade Agreement (commonly referred to as “KORUS”),...

How much discretion should the monetary authority have in setting its policy? This question is analyzed in an economy with an agreed-upon social welfare function that depends on the randomly fluctuating state of the economy. The monetary authority has private information about that state. In the...

The impacts of fluctuations of exchange rates of foreign hard currencies are well documented in economics literature. There are measures taken over by countries to absorb their impacts on income, employment and national economies ability to function and produce. However, distortions are observed...

Over the past two decades, many countries around the world have experienced substantial growth in their economies, driven by inflow of the foreign capital especially in the form of foreign direct investment (FDI). The share of net FDI in world GDP has grown five-fold through recent years, making...

Debt management can be used at low interest rates to lower bond yields, to provide bank assets and thereby help maintain broad money growth, or to save on interest payments. The US example in the 1930s and the recent Japanese case suggest that this tool was not fully exploited in either case

This paper looks at the countries of Central and Eastern Europe (CEE) and the Commonwealth of Independent States (CIS), where economies have been most dramatically hit by the global crisis and its impact is likely to be most long-lasting, especially among poor and vulnerable groups. Using...

How much discretion should the monetary authority have in setting its policy? This question is analyzed in an economy with an agreed-upon social welfare function that depends on the randomly fluctuating state of the economy. The monetary authority has private information about that state. In the...