Abstract The notion that an independent central bank reduces a country’s inflation is a controversial hypothesis. To date, it has not been possible to satisfactorily answer this question because the complex macroeconomic structure that gives rise to the data has not been adequately...

Public debt managers auction bonds to primary dealers (PDs) who may sell them to traders in the secondary market. PDs may have an information advantage about the bond’s value. When the resulting adverse selection problem is severe, the result is a separating equilibrium in which the secondary...