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Speech
Impact of Abundant Reserves on Money Markets and Policy Implementation
Remarks at the SIFMA Webinar (delivered via videoconference).
Working Paper
A monetary model of the exchange rate with informational frictions
Data for the U.S. and the Euro area during the post-Bretton Woods period shows that nominal and real exchange rates are more volatile than consumption, very persistent, and highly correlated with each other. Standard models with nominal rigidities match reasonably well the volatility and persistence of the nominal exchange rate, but require an average contract duration above 4 quarters to approximate the real exchange rate counterparts. I propose a two-country model with financial intermediaries and argue that: First, sticky and asymmetric information introduces a lag in the consumption ...
Discussion Paper
Financial Stability and Interest Rates
In a recent research paper we argue that interest rates have very different consequences for current versus future financial stability. In the short run, lower real rates mean higher asset prices and hence higher net worth for financial institutions. In the long run, lower real rates lead intermediaries to shift their portfolios toward risky assets, making them more vulnerable over time. In this post, we use a model to highlight the challenging trade-offs faced by policymakers in setting interest rates.
Speech
Prepare for Landing
Remarks at the ISDA Benchmark Strategies Forum (delivered via videoconference).
Speech
A Solution to Every Puzzle
Remarks at the 2020 U.S. Treasury Market Conference (delivered via videoconference).