While public debt has risen in the last two decades, the return that it offers to investors has
fallen, especially relative to the return on private investment. This creates a revenue for the …

The covid-19 crisis has led to a sharp deterioration in firm and bank balance sheets. The
government has responded with a massive intervention in corporate credit markets. We …

The government budget constraint ties the market value of government debt to the expected
present discounted value of fiscal surpluses. We find evidence that US Treasury investors …

This review revisits the literature on fiscal capacity using modern tools from asset pricing. We
find that properly accounting for aggregate risk substantially reduces fiscal capacity. In this …

The international monetary system of the last four centuries has experienced the rise,
persistence, and fall of specific currencies as the dominant unit of denomination in global …

Governments around the world embarked on a large fiscal expansion in response to the
GFC and COVID-19 crises, increasing government debt to levels not seen in 75 years. We …

Fiscal policy in advanced economies faces a “Goldilocks dilemma”: Fiscal consolidation
risks prolonged episodes at the zero lower bound (ZLB), while fiscal expansion raises …

Monetary and fiscal policies require coordination to achieve desired macroeconomic
outcomes. The literature since Leeper (1991) has focused on two regimes: monetary …

ABSTRACT A higher US government debt‐to‐output (D‐O) ratio does not forecast higher
surpluses or lower returns on Treasurys in the future. Neither future cash flows nor discount …

A stronger US fiscal condition predicts a higher excess return on the dollar against foreign
currencies in the following year, and more so against foreign currencies with higher dollar …