This paper proposes a theory of foreign reserves as macroprudential policy. We study an
open economy model of financial crises, in which pecuniary externalities lead to …

Over the past two decades, emerging market economies have improved their liability
structures by increasing the share of their debt denominated in local currency. This paper …

We examine optimal credit market policies in two models with durables/capital as collateral.
Pecuniary externalities rationalize ex-ante debt taxes as macroprudential regulation …

This paper examines the financial state-dependent fiscal multipliers in an open economy
with collateral constraints and involuntary unemployment. A persistent fiscal expansion …

In this paper, we incorporate diagnostic expectations into the standard small open economy
model with an occasionally binding constraint. We find that diagnostic expectations can …