Found 50 article(s) for author 'Jeremy Stein'

A Comparative-Advantage Approach to Government Debt Maturity

A Comparative-Advantage Approach to Government Debt Maturity. Robin Greenwood, Samuel Hanson, Jeremy Stein, August 2015, Paper. “The government’s choice of shorter-maturity debt issuance may complement prudential financial regulation by crowding out private issuance, thereby limiting excess private money creation. Although greater short-term government debt increases rollover risk because of a reduction in private short-term debt, the government’s optimal debt maturity choice can reduce the social cost of excessive private debt issuance.Link

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Gradualism in Monetary Policy: A Time-Consistency Problem?

Gradualism in Monetary Policy: A Time-Consistency Problem? Jeremy C. Stein, Adi Sunderam, June 2015, Paper. “We develop a model of monetary policy with two key features: (i) the central bank has private information about its long-run target for the policy rate; and (ii) the central bank is averse to bond-market volatility. In this setting, discretionary monetary policy is gradualist, or inertial, in the sense that the central bank only adjusts the policy rate slowly in response to changes in its privately-observed target. Such gradualism reflects an attempt to not spook the bond market. However, this effort ends up being thwarted in equilibrium…”  Link

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Credit-Market Sentiment and the Business Cycle

Credit-Market Sentiment and the Business Cycle. Jeremy Stein, April 20, 2015, Paper. “Using U.S. data from 1929 to 2013, we show that elevated credit-market sentiment in year t–2 is associated with a decline in economic activity in years t through t+2. Underlying this result is the existence of predictable mean reversion in credit-market conditions. That is, when our sentiment proxies indicate that credit risk is aggressively priced, this tends to be followed by a subsequent widening of credit spreads, and the timing of this widening is, in turn, closely tied to the onset of a contraction in economic activity…Link

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WSJ Event: The Fed’s Challenges as it Scripts an Easy Money Exit

WSJ Event: The Fed’s Challenges as it Scripts an Easy Money Exit. Jeremy Stein, January 15, 2015, Video. “Former Federal Reserve governor Jeremy Stein, in an interview with The Wall Street Journal on Thursday, provided wide-ranging comments on the prospect for central bank interest rate increases this year and the factors weighing on policy makers as they ponder their decision…Link

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The Demand for Short-Term, Safe Assets and Financial Stability: Some Evidence and Implications for Central Bank Policies

The Demand for Short-Term, Safe Assets and Financial Stability: Some Evidence and Implications for Central Bank Policies. Jeremy Stein, November 25, 2014, Paper. “A number of researchers have recently argued that the growth of the shadow banking system in the years preceding the recent U.S. financial crisis was driven by rising demand for “money-like” claims — short-term, safe instruments (STSI) — from institutional investors and nonfinancial firms. These instruments carry a money premium that lowers their yields. While government securities are an important part of the supply…” (May require user account or purchase) Link

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Reforming LIBOR and Other Financial-Market Benchmarks

Reforming LIBOR and Other Financial-Market Benchmarks, Jeremy Stein, September 19, 2014, Paper, “We outline key steps necessary to reform the London Interbank Offered Rate (LIBOR) so as to improve its robustness to manipulation. We first discuss the role of financial benchmarks such as LIBOR in promoting over-the-counter market efficiency by improving transparency. We then describe how to mitigate LIBOR manipulation incentives by…”  Link

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Banks as Patient Fixed Income Investors

Banks as Patient Fixed Income Investors. Samuel G. Hanson, Andrei Shleifer, Jeremy Stein, August 2014, Paper. “We examine the business model of traditional commercial banks in the context of their coexistence wit shadow banks. While both types of intermediaries create safe “money-like” claims, they go about this in very different ways. Traditional banks create safe claims with a combination of costly equity capital and fixed income assets that allows their depositors to remain “sleepy”: They do not have to pay attention to transient fluctuations in the mark-to-market value of bank assets. In contrast…” Link Verified October 18, 2014

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Libor Needs More Competition

Libor Needs More Competition. Jeremy Stein, July 22, 2014, Opinion. “Two years after news broke that traders at the world’s largest banks had been manipulating interest-rate indicators used to value hundreds of trillions of dollars in securities and derivatives, a crucial question remains: How can we restore confidence in benchmarks on which the financial system depends the way the rest of us depend on tap water? Today, an international group of regulators known as the Financial Stability Board issued two reports — to which we contributed — that offer what we see as viable answers…” Link Verified October 11, 2014

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Jeremy Stein: The exclusive exit interview

Jeremy Stein: The exclusive exit interview. Jeremy Stein, July 9, 2014, Opinion. “Harvard economist Jeremy Stein made waves as a governor at the Federal Reserve when he suggested last year that the nation’s central bank should consider using monetary policy to pop financial bubbles and combat instability. He stepped down from the Fed in May, but the debate he helped start rages on among the world’s top economists. In his first public interview since leaving the Fed, Stein talks to us about why there’s no free lunch when central banks try to use broad new regulatory powers to stabilize the financial system…” Link Verified October 11, 2014

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