We investigate the volatility of real interest rates in 10 countries. An equilibrium model with financial frictions mimics the volatility of real rates and predicts a negative correlation of the conditional variance with the business cycle. Our contribution investigates the level and conditional...

"The events of the past decade and a half are the story of two mistakes, one triumph, with the real possibility either of another mistake. Prior to the global financial crisis of 2007-9 many central bankers were dismissive about the need to worry about financial instability. The connection...

Central Bankers are currently facing big challenges in designing and implementing monetary policy, as well as with safeguarding financial stability, with the world economy still in the process of digesting the legacy of the crisis. The crisis has changed central banking in many ways: by shifting...