Home bias is a perennial feature of international capital markets. We review various
explanations of this puzzling phenomenon highlighting recent developments in …

We postulate a continuous‐time heterogeneous agent model with a financial sector and
households to study the nonlinear linkages between aggregate and financial variables. In …

A macroeconomic model with financial intermediation is developed in which the
intermediaries (banks) can issue outside equity as well as short term debt. This makes bank …

We develop a dynamic macroeconomic model with heterogeneous financial intermediaries
and endogenous entry. Time-varying endogenous macroeconomic risk arises from the risk …

Asian economies had faced high economic instability as compared to advanced economies
due to unstable exchange rates, financial dependence on advanced economies, and …

Since the 2001 recession, average core inflation has been below the Federal Reserve's 2%
target. This deflationary bias is a predictable consequence of a symmetric monetary policy …

This paper proposes a tractable framework to analyze fiscal space and the dynamics of
government debt, with a possibly binding zero lower bound (ZLB) constraint. Without the …

We employ a nonlinear vector autoregression and a non-recursive identification strategy to
show that an equal-sized uncertainty shock generates a larger contraction in real activity …

In an environment where economic structures break, variances change, distributions shift,
conventional policies weaken and past events tend to reoccur, economic agents have to …

When the policy rate is at the zero lower bound (ZLB), an increase in uncertainty regarding
the future path of exogenous shocks alters the conditional expectations of relevant prices …