"This paper measures the effects of the risks associated with the war in Iraq on various U.S. financial variables using a heteroskedasticity-based estimation technique. The results indicate that increases in what we call the "war risk" factor caused declines in Treasury yields and equity prices,...

This paper measures the effects of the risk of war on nine U.S. financial variables using a heteroskedasticity-based estimation technique. The results indicate that increases in the risk of war cause declines in Treasury yields and equity prices, a widening of lower-grade corporate spreads, a...

Remarks at the National Association for Business Economics Policy Conference, Arlington, Virginia

Remarks by Brian P. Sack before the Money Marketeers of New York University, New York City.

Remarks at the National Association for Business Economics Policy Conference, Arlington, Virginia

Remarks by Brian P. Sack before the Money Marketeers of New York University, New York City.

This paper argues that interest-rate smoothing may be optimal when the effect of monetary policy is uncertain. A model is presented in which the Federal Reserve rationally learns about the policy multiplier by observing the reaction of the economy to recent choices of the interest rate. As a...