Measures of the decline in r-star are (almost) exclusively based on a fall in government bond
yields. Yet, measures of the return on private aggregate capital are roughly constant, or …

We develop a tractable bubbles model with financial friction and downward wage rigidity.
Competitive speculation in risky bubbles can result in excessive investment booms that …

Under secular stagnation, are helicopter drops of money inflationary? Are they stimulative?
This paper shows that it depends on whether or not a Ponzi scheme of government liabilities …

This paper uses a risk-shifting model to analyze policy responses to asset price booms. We
show risk shifting leads to inefficient asset and credit booms in which asset prices can …

We analyse monetary policy in a model where temporary shocks can permanently scar the
economy's productive capacity. Workers lose skill while unemployed and are costly to …

The paper gives conditions for dynamic inefficiency of laissez-faire allocations in an
overlapping-generations model with safe and risky assets. If the rate of population growth is …

This paper quantifies the costs of a permanent increase in debt to GDP. We employ a
deterministic, overlapping generations model with two assets and no risk of default. The two …

Safe asset shortages can expose an economy to liquidity traps. The nature of these traps is
determined by the cyclicality of the bond premium. A counter-cyclical bond premium opens …

Using a monetary model with asset scarcity, we show that a liquidity trap caused by a
persistent deleveraging shock increases real cash holdings and decreases investment and …

Understanding factors that drive asset demand is central to explaining movements in long-
term real interest rates. In this paper, we begin by documenting that much of the increase in …