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Working Paper
Government finance in a common currency area
Working Paper
The risk premium in the foreign exchange market
Journal Article
Maintaining central bank credibility
Central banks around the world potentially face a skeptical public when they announce a commitment to controlling inflation. Some economists have argued that, to enhance credibility, central banks should adopt monetary growth rules or other institutional arrangements. Yet it appears there are no costless solutions to the credibility problem.
Working Paper
An equilibrium model of spot and forward exchange rates
Working Paper
Elections and macroeconomic policy cycles Anne Sibert
There is an extensive empirical literature on political business cycles, but its theoretical foundations are grounded in pre-rational expectations macroeconomic theory. Here we show that electoral cycle in taxes, government spending and money growth can be modeled as an equilibrium signaling process. The cycle is driven by temporary information asymmetries which can arise if, for example, the government has more current information on its performance in providing for national defense. Incumbents cheat least when their private information is either extremely favorable or extremely unfavorable. ...
Working Paper
Capital accumulation and foreign investment taxation