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New research shows that informal borrowing and lending relationships between firms greatly enhance the liquidity of modern financial systems, but they can also make them more fragile, from Luigi Bocola and Gideon Bornstein nber.org/papers/w31026

Recently accepted by #QJE, “Imperfect Risk Sharing and the Business Cycle,” by Berger, Bocola, and Dovis: doi.org/10.1093/qje/qj…

Excited to see the paper in press this month JPE. Guido Lorenzoni and I study why financial institutions do not hedge their balance sheets against bad economic shocks and what policymakers can do to improve risk sharing.

Looking forward to a great workshop on inflation at the Philly Fed, please send us your papers! Call for papers is at static1.squarespace.com/static/5d09218…

Federico Gavazzonì Profits from higher interest rates? Us banks need Italian lessons…or italians need to mark assets to market

Just wrapped a great SITE session co-organized with Adrien Auclert and Luigi Bocola Thanks to all the presenters and attendees for making it great: economics.stanford.edu/events/site-20…

Worries of default on government debt can inflict significant harm on a struggling economy, even if—as in the case of Italy—the gov't never defaults. Jeff Horwich sums up our recent staff report from our Cristina Arellano w/ YAN BAI & Luigi Bocola bit.ly/3WFlh6b

Bond market data provides evidence of a more “Dovish” policy by the Fed over 2020–2022 and finds it to be a key factor behind the observed increase in inflation, from Luigi Bocola, Alessandro Dovis, Kasper Jørgensen, and Rishabh Kirpalani nber.org/papers/w32620

Rents have been driving inflation recently. Neil Mehrotra, Javier Bianchi, and I have been thinking about the implications for monetary policy. 1/9

Last week I presented "Bond Market Views of the Fed" (nber.org/papers/w32620) at the annual monetary policy conference @ECB. This is a video of my presentation, followed by a great discussion by Klodiana Istrefi and conference participants. youtu.be/9C63Zfcfv20

The road to hell is paved with superbonus

On Fiscal Dominance, a classic is Sargent-Wallace "Unpleasant Monetarist Arithmetic" in the QR. In this QR note I celebrate and revisit it. I show their spectacular example relies on being on the wrong side of a Laffer curve. I offer a variant that strengthens their conclusions.

Happy birthday CREI !!!

Conversazione molto interessante. Le forze politiche italiane dovrebbero discutere di questi temi invece di prendere posizioni dettate da logiche da stadio (pro/contro Milei). Potrebbe diventare la legislatura piu' popolare (e non populista) della storia repubblicana

Celebrating the 70 years birthday of one of the most brilliant economists, Nobu Kiyotaki, at Princeton University . Many friends, ideas and memories