Are there limits to how far reductions in interest rates can boost aggregate demand? In particular, as interest rates fall to very low levels, does the effectiveness of monetary policy in boosting the economy wane? We provide evidence consistent with this hypothesis. Based on a panel of 18...

Previous estimates of the impact of foreign official demand for U.S. Treasuries (USTs) on U.S. interest rates control for domestic conditions only. Yet global cyclical factors jointly shape U.S. yields and foreign demand for USTs. This paper recovers global factors from the cross-section of...