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Credit Market Frictions, Business Cycles, and Monetary Policy

A Research Conference in Honor of Charles Carlstrom and Timothy Fuerst

Charles Carlstrom and Timothy Fuerst were prolific and prominent research economists who, until their untimely deaths a few years ago, were long-associated with the Federal Reserve Bank of Cleveland. To honor their memories and highlight their contributions, the Federal Reserve Board of Governors, the Federal Reserve Bank of Cleveland, and the University of Notre Dame co-sponsored this conference on themes related to their body of work. The conference was held at Notre Dame in October of 2018 and featured presentations of original research and discussions by leading researchers working in the broad areas of macroeconomics and monetary economics.


Day One —Thursday, October 18, 2018

Welcome and Opening Remarks

Matthias Paustian, Federal Reserve Board of Governors

Session I
Chair: Alexander Wolman, Federal Reserve Bank of Richmond

Discouraging Deviant Behavior in Monetary Economics (paper)

Lawrence Christiano, Northwestern University
Yuta Takahashi, Northwestern University

Discussant: Zach Stangebye, University of Notre Dame (discussion)

Income Inequality, Financial Crises, and Monetary Policy (paper)

Isabel Cairó, Federal Reserve Board
Jae Sim, Federal Reserve Board

Discussant: Matthew Rognlie, Northwestern University (discussion)

The Side Effects of Safe Asset Creation (paper)

Sushant Acharya, Federal Reserve Bank of New York
Keshav Dogra, Federal Reserve Bank of New York

Discussant: Alisdair McKay, Federal Reserve Bank of Minneapolis (discussion)

Learning, Confidence, and Business Cycles (paper)

Cosmin Ilut, Duke University
Hikaru Saijo, University of California-Santa Cruz

Discussant: Venky Venkateswaran, NYU Stern and Federal Reserve Bank of Minneapolis (discussion)

State Dependency of Monetary Policy: The Refinancing Channel (paper)

Martin Eichenbaum, Northwestern University
Sergio Rebelo, Northwestern University
Arlene Wong, Princeton University

Discussant: Rüdiger Bachmann, University of Notre Dame (discussion)

Dinner, featuring remarks by Toni Medaglia (Tim’s widow)

Stabilization Policy in a Low-Interest Rate World 

Michael Woodford, Columbia University

Introduced by: Eric Sims, University of Notre Dame

Day Two —Friday, October 19, 2018

Session II
Chair: Argia Sbordone, Federal Reserve Bank of New York

Bubbly Recessions (paper)

Siddhartha Biswas, University of North Carolina
Andrew Hanson, University of North Carolina
Toan Phan, Federal Reserve Bank of Richmond

Discussant: Juan Pablo Nicolini, Federal Reserve Bank of Minneapolis (discussion)

Global Effective Lower Bound and Unconventional Monetary Policy (paper)

Cynthia Wu, University of Notre Dame
Ji Zhang, Tsinghua University

Discussant: Andrew Levin, Dartmouth College (discussion)

Financial Heterogeneity and Monetary Union (paper)

Simon Gilchrist, New York University
Raphael Schoenle, Brandeis University
Jae Sim, Federal Reserve Board
Egon Zakrajšek, Federal Reserve Board

Discussant: Zheng Liu, Federal Reserve Bank of San Francisco (discussion)

Session III
Chair: Alberto Ortiz, Center for Latin American Monetary Studies

Forward Guidance (paper)

Marcus Hagedorn, University of Oslo
Jinfeng Luo, University of Pennsylvania
Iourii Manovskii, University of Pennsylvania
Kurt Mitman
, Stockholm University

Discussant: Jeff Campbell, Federal Reserve Bank of Chicago (discussion)

Money-Financed Fiscal Programs: A Cautionary Tale (paper)

William English, Yale University
Christopher Erceg, Federal Reserve Board
David Lopez-Salido, Federal Reserve Board

Discussant: Nora Traum, HEC Montreal (discussion)

Understanding the Aggregate Effects of Credit Frictions and Uncertainty (paper)

Nathan Balke, Southern Methodist University
Enrique Martínez-García, Federal Reserve Bank of Dallas
Zheng Zeng, Bowling Green State University

Discussant: Andres Blanco, University of Michigan (discussion)

Co-Sponsors: Board of Governors of the Federal Reserve System, Federal Reserve Bank of Cleveland, and University of Notre Dame

When and where

October 18–October 19, 2018
University of Notre Dame, Notre Dame, IN