Optimal Time-Consistent Macroprudential Policy
---- Acknowledgements -----
We thank Fernando Alvarez, Gianluca Benigno, John Cochrane, Lars Hansen, and Charles Engel for useful comments and discussions. We are also grateful for the comments by conference and seminar participants at the Bank for International Settlements, Bank of Korea, Chicago Booth, Cornell, Duke, Federal Reserve Bank of Chicago, Queen's University, Riksbank, University of Wisconsin, Yale, the May 2013 Meeting of the Macro Financial Modeling group, and the '2nd Rome Junior Conference on Macroeconomics' of the Einaudi Institute. The support of the National Science Foundation under awards 1325122 (Mendoza) and 1324395 (Bianchi) is gratefully acknowledged. Some material included in this paper circulated earlier under the title "Overborrowing, Financial Crises and Macroprudential Policy", NBER WP 16091, June 2010. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.