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Working Paper
Can financial innovation help to explain the reduced volatility of economic activity?
The stabilization of economic activity in the mid 1980s has received considerable attention. Research has focused primarily on the role played by milder economic shocks, improved inventory management, and better monetary policy. This paper explores another potential explanation: financial innovation. Examples of such innovation include developments in lending practices and loan markets that have enhanced the ability of households and firms to borrow and changes in government policy such as the demise of Regulation Q. We employ a variety of simple empirical techniques to identify links between ...
Journal Article
Stabilization policy in world context
Journal Article
A monetarist model for economic stabilization
Journal Article
Debt: the threat to economic and financial stability
Speech
Regulation and financial innovation
a speech to the Federal Reserve Bank of Atlanta's 2007 Financial Markets Conference, Sea Island, Georgia (via satellite)
Working Paper
Interpreting monetary stabilization in a growth model with credit goods production
This paper is motivated by observations concerning the size of the banking sector and the growth rate of the economy before and after successful stabilizations of high inflations. The facts suggest that the relative size of the banking sector increases during a period of accelerating inflation and decreases immediately following a successful monetary stabilization. Furthermore, the GDP growth rate is lower during the high inflation period than after stabilization. The goal of this paper is to develop a monetary growth model which is qualitatively consistent with these observations. The model ...
Working Paper
Indeterminacy and stabilization policy
A demonstration of how an income tax schedule that exhibits a progressivity feature can ensure saddle-path stability in a one-sector, real business-cycle model with sufficient increasing returns in production, thereby shielding the economy against sunspot fluctuations.