In countries with credible inflation targeting, it seems plausible to suggest that instead of forming a rational expectation, some firms (inflation-targeters) might simply expect future inflation to always equal its target. This paper analyses the implications of this for optimal monetary policy...

This paper analyses a new-Keynesian model incorporating hysteresis in output. Specifically, we assume that the natural rate of output sluggishly adjusts towards current output. We also assume that the natural rate has an upper bound and that, in addition to having standard objectives, the...

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We develop early warning models for financial crisis prediction by applying machine learning techniques to macrofinancial data for 17 countries over 1870-2016. Most nonlin-ear machine learning models outperform logistic regression in out-of-sample predictions and forecasting. We identify...

This paper explores how the need to transition to a low-carbon economy influences firm credit risk. It develops a novel dataset which augments data on firms' green-house gas emissions over time with information on climate disclosure practices and forward-looking emission reduction targets,...

This paper explores how the need to transition to a low-carbon economy influences credit risk. It develops a novel dataset covering firms' greenhouse gas emissions over time alongside information on strategies for managing transition risk, including climate disclosure practices and...

We examine the role of macroeconomic fluctuations, asset market liquidity, and network structure in determining contagion and aggregate losses in a financial system. Systemic instability is explored in a financial network comprising three distinct, but interconnected, sets of agents - domestic...