We analyze two monetary economies - a cash-credit good model and a limited participation model. In our models, monetary policy is made by a benevolent policymaker who cannot commit to future policies. We define and analyze Markov equilibrium in these economies. We show that there is no time...

We show that central banks face a time inconsistency problem when publishing bank stress test results. Before a stress test, they want to appear tough as the threat of letting banks fail the stress test incentivizes prudent behaviour. After the stress test, they want to act soft by releasing...

Recent SEC regulations mandate that hedge fund advisers provide narrative disclosures of their business and operations. We find that 40% of these disclosures contain inconsistencies regarding advisers' regulatory histories, conflicts of interest (COIs), and risks. Inconsistencies are associated...

We provide a tractable model of motivational goal bracketing by a present-biased individual, extending previous work to show that the main insights from models with rational goals carry over to a setting with non-rational goals. Goals motivate because they serve as reference points that make...

In this note the method of Hamiltonian dynamics is used to characterize the time-consistent solution to the optimal control problem in a deterministic continuous time rational expectations model. A linear quadratic example based on the work of Miller and Salmon is used for simplicity. To derive...

We prove the well-posedness results, i.e. existence, uniqueness, and stability, of the solutions to a class of nonlocal fully nonlinear parabolic partial differential equations (PDEs), where there is an external time parameter $t$ on top of the temporal and spatial variables $(s,y)$ and thus the...

Using a standard dynamic general equilibrium model, we show that the interaction of staggered nominal contracts with hyperbolic discounting leads to inflation having significant long-run effects on real variables

We study new transaction-level data of discount window borrowing in the U.S. between 2010 and 2017, merged with quarterly data on bank financial conditions (balance sheet and revenue). The objective is to improve our understanding of the reasons for why banks use the discount window during...

This paper analyzes exchange rate management in a simple overlapping generations model. This framework is used to evaluate alternative policies in terms of their implications for the welfare of individuals in the economy.The analysis identifies two objectives of monetary policy,providing...