This essay surveys the new monetarist approach to liquidity. Work in this literature strives for
empirical and policy relevance, plus rigorous foundations. Questions include: What is …

Our chapter reviews positive and normative issues in the interaction between monetary and
fiscal policy, with an emphasis on how views on policy coordination have changed over the …

This paper analyzes how bounded rationality affects monetary and fiscal policy via an
empirically relevant enrichment of the New Keynesian model. It models agents' partial …

We propose a theory of monetary policy and macroprudential interventions in financial
markets. We focus on economies with nominal rigidities in goods and labor markets and …

This paper studies optimal fiscal and monetary policy under sticky product prices. The
theoretical framework is a stochastic production economy. The government finances an …

We study optimal monetary policy in an analytically tractable heterogeneous agent New
Keynesian model with rich cross-sectional heterogeneity. Optimal policy differs from a …

When the zero lower bound on nominal interest rates binds, monetary policy cannot provide
appropriate stimulus. We show that, in the standard New Keynesian model, tax policy can …

Macroeconomists have largely converged on method, model design, reduced-form shocks,
and principles of policy advice. Our main disagreements today are about implementing the …

We show that even when the exchange rate cannot be devalued, a small set of conventional
fiscal instruments can robustly replicate the real allocations attained under a nominal …

I study optimal monetary policy in a sticky-price economy wherein households precautionary-
save against uninsured, endogenous unemployment risk. In this economy greater …