This paper investigates how the market implicitly prices very long-dated cash-flows. We do this empirically, using daily market data on the 3½% War Loan, a UK infinite maturity coupon bond. We price the War Loan as an American option with 100 years of maturity. To this end, we perform daily...

In economic discussions, currency board systems are frequently described as arrangements with self-binding character to the monetary authorities by their strict rules and establishments by law. Hard pegs and especially currency boards are often seen as remedies to overcome economic and financial...

This paper explores the macroeconomics of fiscal austerity and deflation in an economy with public debt. A binding budget deficit cap destabilizes the economy by turning the government budget into an automatic destabilizer. Public debt helps maintain AD in the presence of deflation because...