We theoretically and quantitatively analyze the impact of fiscal and monetary stimulus during and after the 2020 Covid recession on output, inflation, and house prices. Our theoretical analysis clarifies that fiscal stimulus increases consumption demand in a recession by providing liquidity, by...

We document the "reserve supply channel" of Quantitative Easing (QE) that has the unintended consequence of reducing bank lending to firms. Each dollar of central bank reserves created by QE crowds out 13 cents of bank lending. We reach this conclusion using a structural model that is estimated...

We estimate risk-free interest rates unaffected by convenience yields on safe assets. We infer them from risky asset prices without relying on any specific model of risk. We obtain a term structure of convenience yields with maturities up to 2.5 years at a minutely frequency. The convenience...

We develop a general equilibrium model in which households' mortgage leverage is determined by supply and demand forces, where the price of credit impacts the quantity of leverage households choose. Mortgages are supplied by financial intermediaries, who offer households a menu of mortgage...

This paper constructs risk-free interest rates implicit in index option prices for 9 of the major G10 currencies. We compare these rates to the yields of government bonds to provide international estimates of the convenience yield earned by safe assets. Average convenience yields across...