Sorting currencies into six portfolios by their forward discounts, this paper shows that a single return-based factor -- the return on the highest minus the return on the lowest interest rate currency …
Even the most extreme departure from complete international asset markets -- one in which investors can hold nothing abroad but the foreign risk-free bond -- fails to match the smoothness of exchange …
PublishedJournal of Political EconomyOnline 1 Mar 2025Published Dec 2025
This paper studies three centuries of U.K. fiscal history to understand the fiscal implications of safe asset supplier status — what the authors call "exorbitant privilege" — and how it can be gained …
Solving a Ramsey model of optimal fiscal and monetary policy in which the government can finance itself only with non-contingent nominal bonds of various maturities, this paper finds that optimal …