International economy

This paper studies the effectiveness of forward guidance when central banks face private agents with heterogeneous expectations allowing for a degree of bounded rationality.

This paper finds empirical evidence of a possible structural break in the relationship between the foreign holdings of U.S. Treasury securities and the U.S. long-term interest rate occurring at the time when U.S. monetary policy became constrained at the zero-lower bound (ZLB).

Recent theories of exchange rate determination have emphasized limited UIP arbitrage by international financial institutions. New regulations since 2008 have also led to imperfect CIP arbitrage. This paper shows that under limited CIP arbitrage the exchange rate and CIP deviation are jointly determined by equilibrium in the FX spot and swap markets.

This paper introduces a new Stata command, xtpb, that implements the Chudik, Pesaran and Smith (2023) Pooled Bewley (PB) estimator of long-run relationships in dynamic heterogeneous panel-data models.

This paper adds to recent evidence on deindustrialization and documents a new pattern: increasing industry polarization over time.

This paper characterizes optimal climate policy in an economy with heterogeneous households and non-homothetic preferences. The authors focus on constrained efficiency, where the planner is restricted from transferring resources across households.