Work in progress

Global Banks' Leverage and its Macroeconomic Effects

Countries with higher net external liabilities against global banks tend to experience a larger drop in their current account balance and in their risky asset prices, and a larger depreciation of their exchange rate following a deleveraging by global banks.

Did the U.S. Really Grow out its WWII Debt?

The U.S. would not have grown its way out of its WWII debt without interest rate distortions and primary surpluses.

Welfare Implications of Debt and Transfers in a Low Safe Rate Environment

This paper discusses the welfare implications of inter-generational transfers and debt rollovers in a stochastic overlapping-generations (OLG) economy where the growth rate is higher than the safe rate but lower than the average marginal product of capital.

Global Business and Financial Cycles: A Tale of Two Capital Account Regimes

Global financial shocks explain a substantial share of equity return variability, but a much smaller portion of real output fluctuations, in a large sample of advanced and emerging economies.

Growth-indexed Bonds and Debt Distribution: Theoretical Benefits and Practical Limits

Sovereign state-contingent bonds have rarely been issued in practice despite their theoretical benefits. This paper provides support for this apparent sovereign noncontingency puzzle by deriving the impact of GIBs on the upper tail of the distribution of the public debt-to-GDP ratio.