Bonds are an important source of funding for municipalities. As financing for big budget construction projects or surprise shortfalls in tax revenue, bonds help smooth tax burden across time. There is good reason for this smoothing: if residents feel their tax burden is excessive, they can...

We study the impact that the liquidity crunch in 2008-2009 had on the U.S. economy's growth trend. To this end, we propose a model featuring endogenous productivity a la Romer and a liquidity friction a la Kiyotaki-Moore. A key finding in our study is that liquidity declined around the Lehman...

A growing recent theoretical literature advocates the use of prudential capital control policy, that is, the tightening of restrictions on cross-border capital flows during booms and the relaxation thereof during recessions. We examine the behavior of capital controls in a large number of...