China's recent monetary stimulation has substantially boosted economic. We argue that its efficacy derives from state control over its banking and corporate sectors. Beijing ordered state-owned banks to lend, and they lent. Beijing ordered centrally-controlled state-owned enterprises (SOEs) to...

Motivated by empirical evidence, we propose an open-economy New Keynesian model that allows financial intermediaries to hold foreign long-term bonds. We find financial integration amplifies the effects of an expansionary domestic monetary policy shock and turns an expansionary foreign monetary...

Yes! We study the substitutability between conventional monetary policy based on the adjustment of a short term policy interest rate with quantitative easing (QE). We do so in a four equation New Keynesian model featuring financial frictions that allows QE to be economically relevant. We...

We investigate the relationship between uncertainty about monetary policy and its transmission mechanism, and economic fluctuations. We propose a new term structure model where the second moments of macroeconomic variables and yields can have a first-order effect on their dynamics. The data...

This paper studies the implications of household heterogeneity for the effectiveness of quantitative easing (QE). We consider a heterogeneous agent New Keynesian (HANK) model with uninsurable household income risk. Financial intermediaries are subject to an endogenous leverage constraint that...

Motivated by empirical evidence, we propose an open-economy New Keynesian model with financial integration that allows financial intermediaries to hold foreign long-term bonds. We find financial integration features an amplification for a domestic monetary policy shock and a negative spillover...