Several countries now require banks or money market funds to impose state-contingent costs on shortterm creditors to absorb financial stress. We study these requirements as part of the broader prudential toolkit in a model with five key ingredients: banks may face an aggregate stress state with...

Several countries now require banks or money market funds to impose state-contingent costs on shortterm creditors to absorb financial stress. We study these requirements as part of the broader prudential toolkit in a model with five key ingredients: banks may face an aggregate stress state with...

Macroeconomic Theory and History -- Basic Macroeconomic Model -- Exogenous and Endogenous Fluctuations -- Exogenous and Endogenous Growth -- Asset Prices and Bubbles -- Credit Cycle -- Cash Payment and Inflation -- Complete and Incomplete Markets -- Liquidity Constraints -- Endogenously...

We characterize the optimal linear tax on capital in an Overlapping Generations model with two period lived households facing uninsurable idiosyncratic labor income risk. The Ramsey government internalizes the general equilibrium effects of private precautionary saving on factor prices. For...