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Discussion Paper
The Relationship between Macroeconomic Overheating and Financial Vulnerability : A Narrative Investigation
In this note, we follow a narrative approach to review historical episodes of significant financial imbalances and examine whether these episodes were linked to macroeconomic overheating.
Discussion Paper
The Relationship between Macroeconomic Overheating and Financial Vulnerability : A Quantitative Exploration
In this note, we explore the link between indicators of financial imbalances and macroeconomic performance, focusing on the experience of the United States. In an accompanying note, The Relationship between Macroeconomic Overheating and Financial Vulnerability: A Narrative Investigation, we follow a narrative approach to review historical episodes of significant financial imbalances and examine whether these episodes were linked to macroeconomic overheating.
Discussion Paper
The Potential Increase in Corporate Debt Interest Rate Payments from Changes in the Federal Funds Rate
This note studies the response of interest expenses of U.S. nonfinancial corporations to an increase in interest rates.
Discussion Paper
The Information in Interest Coverage Ratios of the US Nonfinancial Corporate Sector
Using firm-level data, we find significant variability in interest coverage ratios--across firms and economic sectors and across time--that suggests that critical ICR levels depend on firm- or sector-specific economic conditions.
Working Paper
Real and Nominal Equilibrium Yield Curves: Wage Rigidities and Permanent Shocks
The links between real and nominal bond risk premia and macroeconomic dynamics are explored quantitatively in a model with nominal rigidities and monetary policy. The estimated model captures macroeconomic and yield curve properties of the U.S. economy, implying significantly positive real term and inflation risk bond premia. In contrast to previous literature, both premia are positive and generated by wage rigidities as a compensation for permanent productivity shocks. Stronger policy-rule responses to inflation (output) increase (decrease) both premia, while policy surprises generate ...