We seek to understand how Laffer curves differ across countries in the US and the EU-14, thereby providing insights into fiscal limits for government spending and the service of sovereign debt. As an application, we analyze the consequences for the permanent sustainability of current debt...

This paper proposes to estimate the dynamic effects of monetary policy in a data rich environment by combining a \textit{Bayesian factor augmented vector autoregression} (BFAVAR) with the agnostic identification method introduced by Uhlig (2005), imposing sign restrictions on the shape of...

We present a DSGE model where firms optimally choose among alternative instruments of external finance. The model is used to explain the evolving composition of corporate debt during the financial crisis of 2007-09, namely the observed shift from bank finance to bond finance despite the...

We estimate the effects of monetary policy shocks in a Bayesian factor-augmented vector autoregression (BFAVAR). We propose a novel identication strategy of imposing sign restrictions directly on the impulse responses of large sets of variables. The novel feature and key strength of our approach...

Is it possible to explain the house price to GDP ratio and the house price to stock price ratio as being generally constant, deviating from its respective mean only because of shocks to productivity? We build a two-sector RBC model for residential and non-residential capital with adjustment...

Epstein-Zin preferences (or ``EZ'' preferences) have become increasingly popular in recent asset pricing work. Dynamic stochastic general equilibrium (DSGE) models which feature Epstein-Zin preferences are typically considered technically challenging, often thought to require sophisticated...

We quantify the size, uncertainty and sensitivity of fiscal multipliers in response to the American Recovery and Reinvestment Act (ARRA) of 2009. To that end, we extend the benchmark Smets- Wouters (Smets and Wouters, 2007) New Keynesian model, allowing for credit-constrained households, a...

Inspired by the European debt crisis of 2010, this paper provides a theoretical framework to analyze the dynamics of sovereign debt crises in a monetary union. I assume that there is a maturity mismatch between the short maturity debt of a country and the long horizon flow of tax revenues, i.e.,...

This paper seeks to understand the interplay between banks, bank regulation, sovereign debt crisis and central banking in a monetary union, emphasizing the role of emergency lending.

In this paper, I investigate the scope of a model with exogenous habit formation -- or ``catching up with the Joneses'', see Abel (1990) -- to generate the observed equity premium as well as other key macroeconomic facts. Along the way, I derive restrictions for four out of eight parameters for...