A long time in the making, we finally cracked this nut: very excited about this new and hopefully impactful paper. We show that optimal management of crises entails joint optimization of prudential and bailout polices. There is also a new multiplicity r…
RP @nber.org: Both macroprudential regulation and bailouts are essential to manage crises. Limiting either component can lead to welfare losses, highlighting that these policies are complementary, from Gianluca Benigno, @arebucci.bsky.social, and Aliaks…
Both macroprudential regulation and bailouts are essential to manage crises. Limiting either component can lead to welfare losses, highlighting that these policies are complementary, from Gianluca Benigno, @arebucci.bsky.social, and Aliaksandr Zaretski …