Collateral constraints widely used in models of financial crises feature a pecuniary externality: Agents do not internalize how borrowing decisions taken in “good times” affect collateral prices during a crisis. We show that agents in a competitive equilibrium borrow more than a financial regulator who internalizes this externality. We also find, however, that under commitment the regulator's plans are time-inconsistent, and hence focus on studying optimal, time-consistent policy without commitment. This policy features a state-contingent macroprudential debt tax that is strictly positive at date t if a crisis has positive probability at t + 1. Quantitatively, this policy reduces sharply the frequency and magnitude of crises, removes fat tails from the distribution of returns, and increases social welfare. In contrast, constant debt taxes are ineffective and can be welfare-reducing, while an optimized “macroprudential Taylor rule” is effective but less so than the optimal policy. Javier Bianchi Department of Economics University of Wisconsin 1180 Observatory Drive Madison, WI 53706-139 and NBER javieribianchi@gmail.com Enrique G. Mendoza Department of Economics University of Pennsylvania 3718 Locust Walk Philadelphia, PA 19104 and NBER egme@sas.upenn.edu

The interaction between credit frictions, financial innovation, and a switch from optimistic to pessimistic beliefs played a central role in the 2008 financial crisis. This paper develops a quantitative general equilibrium framework in which this interaction drives the financial amplification mechanism to study the effects of macroprudential policy. Financial innovation enhances the ability of agents to collateralize assets into debt, but the riskiness of this new regime can only be learned over time. Beliefs about transition probabilities across states with high and low ability to borrow change as agents learn from observed realizations of financial conditions. At the same time, the collateral constraint introduces a pecuniary externality, because agents fail to internalize the effect of their borrowing decisions on asset prices. Quantitative analysis shows that the effectiveness of macroprudential policy in this environment depends on the government's information set, the tightness of credit constraints, and the pace at which optimism surges in the early stages of financial innovation. The policy is least effective when the government is as uninformed as private agents, credit constraints are tight, and optimism builds quickly.

The radio spectroscopy has became a fundamental tool to study astronomical objets at the microwave band. Therefore, the design and construction of instruments with high spectral resolution, low power consumption and compact size for easy handle and transport are necessary. Here we present the design and the tests of an acousto-optical spectrometer for use in solar radio astronomy and for variability studies of cosmic masers sources with a 5 meter antenna (RT5) which is being reinstalled at the Sierra Negra site. We present the first evaluations of the performance of the components and the laboratory assembly.

Los problemas del lenguaje en la adolescencia constituyen un área de especial interés para la logopedia actual, tanto por sus consecuencias negativas en el rendimiento académico como por su implicación en el plano social y de comunicación interpersonal.

This paper shows that the quantitative predictions of a DSGE model with an endogenous collateral constraint are consistent with key features of the emerging markets' Sudden Stops. Business cycle dynamics produce periods of expansion during which the ratio of debt to asset values raises enough to trigger the constraint. This sets in motion a deflation of Tobin's Q driven by Irving Fisher's debt-deflation mechanism, which causes a spiraling decline in credit access and in the price and quantity of collateral assets. Output and factor allocations decline because the collateral constraint limits access to working capital financing. This credit constraint induces significant amplification and asymmetry in the responses of macro-aggregates to shocks. Because of precautionary saving, Sudden Stops are low probability events nested within normal cycles in the long run.

To study the joint decision of holding sovereign debt and reserves, we construct a stochastic dynamic equilibrium model that incorporates willingness-to-pay incentive problems. In this setup, debt and assets are not perfect substitutes, as reserves can be used even after a country has defaulted. We calibrate the model to a sample of emerging markets. We obtain that the reserve accumulation does not play a quantitatively important role in this model. In fact, the optimal policy is not to hold reserves at all. This finding is robust to considering interest rate shocks, sudden stops, contingent reserves and reserve dependent output costs. Laura Alfaro Harvard Business School Morgan Hall 263 Soldiers Field Boston, MA 02163 and NBER lalfaro@hbs.edu Fabio Kanczuk University of São Paulo R. Dr Alberto Cardoso de Melo Neto 110/131A Sao Paulo-S.P.-CEP 01455-100 BRAZIL kanczuk@usp.br

This chapter presents excerpts from Enrique Mendoza’s probing interviews with Guillermo. These offer an incisive and penetrating look into Guillermo’s intellectual evolution and his views about the major ideas that have shaped the profession, both academically and from a public policy point of view.