Journal publications
"Expectations about the Federal Reserve’s Balance Sheet and the Term Structure of Interest Rates," with Jane Ihrig, Elizabeth Klee, Canlin Li, and Min Wei. International Journal of Central Banking, 14(2): 341-390. 2018.
https://www.ijcb.org/journal/ijcb18q1a8.htm
Working papers
1. Central bank balance sheet size, net interest income, and policy rate amplification (JMP)
Abstract: This paper builds a quantitative New-Keynesian model with a central bank balance sheet, fiscal policy, and a representative financial intermediary facing uncertainty to show how interest rate policy has an additional counter-cyclical fiscal impact via central bank income when reserves are abundant as opposed to scarce. A counterfactual analysis between the US economies with small and large central bank balance sheets of 2005 and 2018 shows that in response to demand, supply, and government spending shocks, the real effects of identical interest rate changes are amplified in the abundant reserves economy. In response to a 1% preference shock, cumulative fluctuations are 4.5% lower in the output gap and 3.4% lower in inflation in the abundant reserves economy.
2. Asymmetric interest rate smoothing and financial development [new draft coming soon] (w/ Scott Abrahams and Isaac Green)
Abstract: This paper utilizes a panel dataset of central bank policy rates to provide evidence for asymmetric interest rate smoothing of central banks globally. During monetary easing interest rate cycles, central banks achieve the terminal policy rate at a faster pace than interest rate tightening cycles. This asymmetry is robust to real side factors in a Taylor type monetary rule. Policy rate cycles for central banks in countries that have higher levels of financial development display a stronger asymmetric smoothing than central banks in countries with less financial development. This finding provides evidence that central banks are cautious during interest rate tightening cycles to avoid financial stability risks which can have real economic impacts.
Works in Progress
1. Fiscal support for exchange rate targets (w/ Joao Hernández)
2. Time consistent deposit insurance (w/ Gaetano Antinolfi)
Other publications
"Bitcoin’s decentralized decision structure," with Ben Craig. Federal Reserve Bank of Cleveland Economic Commentary. 2019-12.