The paper solves the optimal sampling problem of a decision-maker that wants to predict a target variable. We prove the existence of complementarities between the sample size and the number of explanatory variables in a data set. We show that the optimal dimensions of the data set reflect the...

How do capital flows affect the synchronization of two countries’ financial cycles? We obtain data onbilateral capital flows and domestic financial cycles to introduce a ”Finance Co-movement Slope” thatdescribes this relationship. We find that this slope is positive and increasing in the...

How do capital flows affect the synchornization of two countries' financial cycles? We obtain data on bilateral capital flows and domestic financial cycles to introduce a "Finance Co-movement Slope" that describes this relationship. We find that this slope is positive and increasing in the time...

We show that the defining features of the Great Moderation were a shift from output volatility to medium-term fluctuations and a shift in the origin of those fluctuations from the real to the financial sector. We discover a Granger-causal relationship by which financial cycles attenuate...

This paper studies the incidence of bailouts with the possibility that bailouts may be required repeatedly before the crisis is resolved. I build a model in which two countries engage in a strategic interaction over repeated bailouts and austerity. The strategic interaction ends when the country...