While public debt has risen in the last two decades, the return that it offers to investors has
fallen, especially relative to the return on private investment. This creates a revenue for the …

In response to the COVID-19 pandemic, large parts of the economy were locked down and,
as a result, households' income risk rose sharply. At the same time, policy makers put …

We show how a heterogeneous agent New Keynesian (HANK) model with incomplete
markets and portfolio choice can be estimated in state space using a Bayesian approach. To …

In response to the COVID-19 pandemic, large parts of the economy were locked down and,
as a result, households' income risk rose sharply. At the same time, policy makers put …

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 …

A tractable incomplete-market model with endogenous unemployment risk, sticky prices,
real wage rigidity and a fiscal side is calibrated to Euro Area countries and used to analyze …

This paper compares the COVID-19 recession in the euro area (EA) and the US using an
estimated multi-region New Keynesian macroeconomic model. To capture quarterly …

We show that in a New Keynesian model with household heterogeneity, fiscal policy can be
a perfect substitute for monetary policy: three simple conditions for consumption taxes, labor …

Abstract We develop a New Keynesian model with household heterogeneity and bounded
rationality in the form of cognitive discounting. The interaction of household heterogeneity …

This work quantifies the size of fiscal multipliers in an economy with sovereign and bank
default risks. The paper presents an estimated two-region dynamic stochastic general …