This paper finds that limited exchange rate flexibility in the form of “fear of appreciation” significantly slows adjustment of current account imbalances, providing novel support for Friedman’s conjecture regarding exchange-rate flexibility. We present a new stylized fact: floaters have...

We investigate the effect of trade integration on interstate military conflict. Our empirical analysis, based on a large panel data set of 243,225 country-pair observations from 1950 to 2000, confirms that an increase in bilateral trade interdependence significantly promotes peace. It also...

We study the impact of sovereign solvency on the private-public savings offset. Using data on 80 economies for 1989–2010, we find robust evidence for a U-shaped pattern in the private-public savings offset in sovereign credit ratings. While the 1:1 savings offset implied by Ricardian...

We propose a search and matching model that can account for a long-run joint relationship between inflation, unemployment, and equity prices. The model predicts the following longrun joint relationship: (i) a positive relationship between inflation and unemployment; (ii) a negative relationship...

This study documents robust empirical evidence that a significant joint relationship between the long-term trends of inflation, unemployment, and equity prices exists in the post-WWII U.S. data: (i) a positive relationship between inflation and unemployment; (ii) a negative relationship between...

Using data for 20 countries during 1975–2011, this study provides new evidence on the association between the lack of competition, measured by an increase in markups, and income inequality. We find that an increase in markups is positively associated with rising income inequality. More...

We investigate the role of exchange rate regimes in the international transmission of business cycles during the global financial crisis. We find that exchange rate regimes alone did not account for differences in the international transmission of business cycles during the crisis. However,...