We study the consequences of non-neutrality of government debt for macroeconomic stabilization policy in an environment where prices are sticky. Assuming transaction services of government bonds, Ricardian equivalence fails because public debt has a negative impact on its marginal rate of return...

Recently, the world economy has seen its greatest down turn since World War II. Although not as bad as during the Great Depression, there was still a worrisome increase in protectionist measures, in an attempt to mitigate the economic downturn. Protectionism can have many different faces. It can...

This paper documents the macroeconomic effects of changes in downpayment requirements on mortgage loans in a model where investment is undertaken by collateral- constrained agents. I find that a permanent tightening in lending standards substantially lowers aggregate spending in the short run...