Financial stability is an important goal of policy, but the relation of financial stability to economic performance and even the meaning of the term itself are poorly understood. This paper explores these issues in a theoretical model. The authors argue that financial instability, or fragility,...

Ben Bernanke is a leading macroeconomist who has contributed extensively to the literature on business cycles, monetary policy, the role of financial markets in economic fluctuations, inflation targeting and the economics of the Great Depression. He is one of the six economists who form the NBER...

This paper develops a simple neoclassical model of the business cycle in which the condition of borrowers' balance sheets is a source of output dynamics. The mechanism is that higher borrower net worth reduces the agency costs of financing real capital investments. Business upturns improve net...

Dr. Ben S. Bernanke, the Chairman of the Council of Economic Advisers, and nominee to be Chairman of the Board of Governors of the Federal Reserve System, explains why the "Leave it to Beaver model of economic security is increasingly less viable in today's world," and describes what can be done...

The articles in this symposium cover some of the most active areas of research in macroeconomics. By design, each article is structured to present both a theoretical framework and empirical evidence. Through this structure, the articles synthesize recent developments, present new results, and...