Antidumping Investigations and the Pass-Through of Antidumping Duties and Exchange Rates

By Bruce A. Blonigen and Stephen E. Haynes

American Economic Review, September 2002

Optimal Fiscal and Monetary Policy with Distorting Taxes

By Christopher A. Sims

American Economic Journal: Macroeconomics, April 2025

When government debt pays a lower return than private assets, the reasoning in Friedman's (1969) essay on the optimal quantity of money suggests that it would be optimal to expand the debt until its return matched that on private assets. When the only oth...

Terms-of-Trade Shocks Are Not All Alike

By Federico Di Pace, Luciana Juvenal, and Ivan Petrella

American Economic Journal: Macroeconomics, April 2025

Terms of trade are an inaccurate empirical proxy for how fluctuations in international prices affect the economy. To capture the relevance of terms-of-trade fluctuations for the domestic business cycle, the role of export and import prices needs to be ana...

Fragile New Economy: Intangible Capital, Corporate Savings Glut, and Financial Instability

By Ye Li

American Economic Review, April 2025

The transition toward an intangible-intensive economy reshapes financial systems by creating a self-perpetuating savings glut in the production sector. As intangibles become increasingly important, firms hoard liquidity to finance investment in intangible...

The Evolving Core of Usable Macroeconomics for Policymakers

By Jonas Fisher, Bart Hobijn, and Alessandro T. Villa

AEA Papers and Proceedings, May 2025

Macroeconomic models and policymakers' language have evolved significantly. Today's policy discussions center on New Keynesian (NK) synthesis, which builds on the neoclassical growth model and the AS-AD framework. It incorporates nominal and real rigiditi...

Regional Dissent: Do Local Economic Conditions Influence FOMC Votes?

By Anton Bobrov, Rupal Kamdar, and Mauricio Ulate

American Economic Review: Insights, June 2025

US monetary policy decisions are made by the 12 voting members of the FOMC, seven of which inherently represent national-level interests. The remaining members, a rotating group of presidents from the 12 Federal Reserve districts, come instead from subnat...

Corporate Discount Rates

By Niels Joachim Gormsen and Kilian Huber

American Economic Review, June 2025

We construct a dataset of firms' discount rates (i.e., required returns to capital) and perceived cost of capital using corporate conference calls. The relation between discount rates and the cost of capital is far below the one-to-one mapping assumed in ...

Cyclical Attention to Saving

By Alistair Macaulay

American Economic Journal: Macroeconomics, October 2025

I explore the business-cycle implications of household inattention to savings product choices. In a model with heterogeneous banks, savers pay more attention to their bank choice when the marginal utility of income is high. Consistent with this, in data f...

Market Segmentation and International Bond Prices: The Role of ECB Asset Purchases

By Ester Faia, Juliana Salomao, and Alexia Ventula Veghazy

American Economic Journal: Macroeconomics, October 2025

We estimate euro-dollar yields differences, hedged and unhedged, with euro area confidential corporate bond holdings data. We find that euro yields significantly decline relative to dollar yields—more for securities in the portfolios of investors that p...

Monetary Policy and the Labor Market: A Quasi-experiment in Sweden

By John Coglianese, Maria Olsson, and Christina Patterson

American Economic Review, October 2025

We analyze a monetary quasi-experiment in Sweden from 2010–2011, when the Riksbank raised the interest rate substantially. We argue that this increase was beyond what labor market conditions warranted, driven instead by new concerns about financial stab...

A Preferred-Habitat Model of Term Premia, Exchange Rates, and Monetary Policy Spillovers

By Pierre-Olivier Gourinchas, Walker Ray, and Dimitri Vayanos

American Economic Review, November 2025

We develop a two-country model in which currency and bond markets are populated by different investor clienteles, and segmentation is partly overcome by arbitrageurs with limited capital. Risk premia in our model are time-varying, connected across markets...

Borrowing and Spending in the Money: Debt Substitution and the Cash-Out Refinance Channel of Monetary Policy

By Elliot Anenberg, Tess Scharlemann, and Eileen van Straelen

American Economic Review, November 2025

We show that the strong negative effect of higher mortgage rates on cash-out refinancing reflects substitution into other borrowing products, not large changes in total new household borrowing. We exploit plausibly exogenous changes in interest rates due ...

Japan's Debt Puzzle: Sovereign Wealth Fund from Borrowed Money

[Symposium: Government Debt]

By Yili Chien, Wenxin Du, and Hanno Lustig

Journal of Economic Perspectives, Fall 2025

We analyze the risks associated with Japan's prolonged low-interest rate policies amid a global environment of rising rates. To finance its persistent deficits, the Japanese public sector depends on inexpensive domestic funding to invest in risky assets b...

Putting US Fiscal Policy on a Sustainable Path

[Symposium: Government Debt]

By Karen Dynan and Douglas Elmendorf

Journal of Economic Perspectives, Fall 2025

Even allowing for uncertainty about the future economy, current US fiscal policies are almost certainly unsustainable. Therefore, policymakers must decide when and in what ways to raise taxes and reduce spending to put debt on a lower trajectory. Acting s...

The Economic Costs of Conflict: A Case Study of the Basque Country

By Alberto Abadie and Javier Gardeazabal

American Economic Review, March 2003

This article investigates the economic effects of conflict, using the terrorist conflict in the Basque Country as a case study. We find that, after the outbreak of terrorism in the late 1960's, per capita GDP in the Basque Country declined about 10 percen...

A Goldilocks Theory of Fiscal Deficits

By Atif Mian, Ludwig Straub, and Amir Sufi

American Economic Review, December 2025

We develop a tractable framework for deficit and debt dynamics. A "free lunch" fiscal deficit—one that raises spending without higher future taxes—is sustainable without zero lower bound (ZLB) only when R < G − φ, where φ is the sensitivity of the...

Liquidity Traps: A Unified Theory of the Great Depression and the Great Recession

By Gauti B. Eggertsson and Sergei K. Egiev

Journal of Economic Literature, December 2025

This review of liquidity traps unifies three landmark economic downturns—the US Great Depression, the Great Recession, and Japan's Long Recession—into a single analytical framework. We examine various forces that drive natural interest rates negative:...

Estimating the Effect of Mother's Schooling on Children's Schooling Using a Sample of Adoptees

By Erik Plug

American Economic Review, March 2004

The Institutions of Monetary Policy

By Mervyn King

American Economic Review, May 2004

Conducting Monetary Policy at Very Low Short-Term Interest Rates

By Ben S. Bernanke and Vincent R. Reinhart

American Economic Review, May 2004