We provide a simple framework to study the prudential use of capital controls and currency
reserves that have been explored in the recent literature. We cover the role of both …

We model sudden stops in a small open economy as rare discrete events precipitated by
increases in the world risk-free rate. When external debt is large, the model exhibits multiple …

We examine the effects of tighter capital requirements in a quantitative model of risky
financial intermediaries partly funded with foreign currency debt. Setting bank capital …

We derive sufficient statistics that describe how the financial sector transmits
macroeconomic policies to aggregate demand. Our framework nests models of financial …

We examine optimal credit market policies in two models with durables/capital as collateral.
Pecuniary externalities rationalize ex-ante debt taxes as macroprudential regulation …

This paper investigates the stabilization role of government spending in a
collateralconstrained small open economy. The economy is characterized by inefficiencies …

This paper investigates the stabilization role of government spending in a collateral-
constrained small open economy. The economy is characterized by inefficiencies in …

We study how the financial sector affects fiscal and monetary policy in heterogeneous agent
New Keynesian (HANK) economies. We show that, in a large class of models of financial …