Search Results
Journal Article
\\"Frictions in financial and labor markets\\": a summary of the 35th Annual Economic Policy Conference
This article contains synopses of the papers presented at the 35th Annual Economic Policy Conference of the Federal Reserve Bank of St. Louis held October 21-22, 2010. The conference theme was ?Frictions in Financial and Labor Markets.? Leading participants in this field presented their research and commentary.
Working Paper
Optimal Management of an Epidemic: Lockdown, Vaccine and Value of Life
This paper analyzes the optimal management of a pandemic (stay-at-home and vaccination policies) in a dynamic model. The optimal lockdown policies respond to the spread of the virus with significant restrictions to employment, followed by partial loosening before the peak of the epidemic. Upon the availability of a vaccine, the optimal vaccination policy has an almost bang-bang property, despite the loss of immunity of the vaccinated: vaccinate at the highest possible rate, and then rapidly converge to the steady state. The model illustrates interesting trade-offs as it implies that lower ...
Journal Article
Inflation, growth, and financial intermediation
Conference Paper
Inflation, growth, and financial intermediation
Journal Article
Monetary Policy with Declining Deficits: Theory and an Application to Recent Argentine Monetary Policy
The authors study the nature of the optimal monetary policy in a regime of fiscal dominance when the monetary authority?which can print money or issue interest-earning debt?is required to finance an exogenous sequence of transfers to the Treasury. They show that the degree of commitment on the part of the monetary authority has a significant impact on the details of the optimal policy. They apply this model to the recent experience of Argentina and find that the inflation rate experienced by Argentina during the first year of the monetary program is close to the predictions of a weakly ...
Journal Article
What Determines Debt Maturity?
What determines the maturity structure of debt? In this article, I develop a simple model to explore how the optimal maturity of debt issued by a firm (or a country) depends both on the firm?s cyclical state and other features of the economic environment in which it operates. I find that firms with better current earnings and better growth prospects issue debt with longer maturity, while firms operating in more-volatile environments issue debt with shorter maturity. Yield to maturity is a poor indicator of the risk of debt issued by a firm. The reason is simple: Yield to maturity captures ...
Journal Article
Human Capital and Development
Perhaps no question has attracted as much attention in the economics literature as ?Why are some countries richer than others?? In this article, the author revisits the ?development problem? and provides some estimates of the importance of human capital in accounting for cross-country differences in output per worker. His results suggest that human capital has a central role in determining the wealth of nations and that the quality of human capital varies systematically with the level of development.
Journal Article
Policy Instability and the Risk-Return Trade-Off
What is the impact of large swings in economic policy on the risk-return trade-off faced by investors? What is the impact of changes in policy regimes on investment strategies? In this paper we study the impact on returns of switches between periods of market-friendly economic policies and periods of populist policies. To quantify the impact of policy instability, we use data from Argentina—a country that has experienced frequent and very large regime changes—and find that the risk-return for individual assets and minimum variance portfolios are quite different across regimes. We then ...