We assess the motivations for changing capital controls and their effectiveness in India, a country with extensive and long-standing controls. We focus on the controls on[...]

Because financial and macroeconomic conditions are tightly interconnected, financial stability considerations are an important element of any monetary policy framework. Y[...]

Empirical evidence suggests financial intermediaries increase risky investments when interest rates are low. We develop a model consistent with this observation and ask w[...]

We review key characteristics of the hedge fund industry, and identify conditions under which this sector can pose a threat to financial stability. Direct regulation of h[...]

Inflation distorts an economy through many channels. This paper highlights the interaction between inflation and capital gains tax and their distortions to a small open e[...]

Recent reform proposals call for an elimination of the constant net asset value (NAV) or "buck" in money market mutual funds to reduce the occurrence of runs. Outside the[...]

Do cognitive biases call for regulation to limit the use of credit? We incorporate over-optimistic and rational borrowers into an incomplete markets model with consumer b[...]

We develop a model in which a financial intermediary's investment in risky assets—risk taking—is excessive due to limited liability and deposit insurance, and characteriz[...]

I use a unique institutional feature of money market funds to identify whether funds hold additional liquidity to guard against and prevent potential investor runs. Speci[...]

Interconnectedness among insurers and reinsurers at a global level is not well understood and may pose a significant risk to the sector, with implications for the macroec[...]