In reaction to the recent financial crisis, increased attention has recently been given to
financial transaction taxes (FTTs) as a means of (1) raising revenue for a variety of possible …

This paper surveys the theoretical and empirical literature on the macroeconomic
implications of financial imperfections. It focuses on two major channels through which …

We examine how the banking sector could ignite the formation of asset price bubbles when
there is access to abundant liquidity. Inside banks, to induce effort, loan officers are …

A framework for macroprudential regulation that defines systemic risk and macroprudential
policy, describes macroprudential tools, and surveys the effectiveness of existing …

This paper analyses the possibility and the consequences of rational bubbles in a dynamic
economy where financially constrained firms demand and supply liquidity. Bubbles are more …

Abstract The Great Financial Crisis of 2007-09 confirmed the vital importance of advancing
our understanding of macrofinancial linkages, the two-way interactions between the real …

This study analyzes economies with an essential role for liquid assets in the exchange
process. The model can generate multiple stationary equilibria, across which asset prices …

We develop a model of financial intermediation wherein bank managers “reach for yield”–by
overinvesting in risky assets and underinvesting in safer assets–provided they do not face …

This report responds to the request of the G-20 leaders for the IMF to:“... prepare a report for
our next meeting [June 2010] with regard to the range of options countries have adopted or …

Observers often interpret boom–bust episodes in asset markets as speculative frenzies
where asymmetrically informed investors buy overvalued assets hoping to sell to a greater …