Blog Posts

The petrodollar system has been a significant factor in shaping the global economy for nearly half a century. This system, which revolves around the trade of oil for US dollars, has sustained the value and reserve currency status of the US dollar and influenced global politics and economics since its inception in the 1970s. This […]

The Bretton Woods system, established in 1944, marked a significant milestone in the history of the global monetary system. It laid the foundation for the current system of international finance and trade, shaping economic policies for decades. This article will look at the formation and breakdown of the Bretton Woods system, its implications, and the […]

Zoltan Pozsar, a prominent economist and former managing director at Credit Suisse, has made significant contributions to the understanding of the financial system’s inner workings. His extensive research and analysis have looked at the intricacies of the global funding market, a multitrillion-dollar ecosystem where Wall Street (i.e., banks, brokers, asset managers, and related entities), corporations, […]

The shadow rate is a concept in financial models, primarily used to measure the economy when nominal interest rates approach the zero lower bound. It was introduced by Fischer Black (1938-1995) in his final paper, “Interest Rates as Options,” and has gained renewed interest following the Financial Crisis of 2007-2008 when nominal interest rates hit […]

The Black-Derman-Toy (BDT) model, developed by Fischer Black (of Black-Scholes fame), Emanuel Derman, and William Toy in 1990, is a prominent short-rate model used in finance. The BDT model is widely employed to price and manage interest rate derivatives, making it an important tool for banks, financial institutions, and professional traders and investors who transact […]

The Chen Model, named after its creator, Nan Chen, is a prominent type of short-rate model that plays a significant role in finance. Short-rate models are mathematical models used to describe the behavior of interest rates over time. They are particularly useful for pricing fixed-income securities, managing interest rate risk, and implementing interest rate derivatives […]

The Hull-White Model, named after its creators, John Hull and Alan White, is a widely used short-rate model in finance. It plays an important role in understanding the behavior of interest rates and pricing a variety of fixed-income securities and interest rate derivatives. The model’s simplicity, tractability, and flexibility make it a popular choice among […]

The concept of the “Debt Jubilee” has been a subject of discussion and debate among financial experts, historians, and politicians for centuries. The concept revolves around the cancellation of debts and resetting the economic system for a fresh start. Naturally, it’s quite a controversial subject. In this article, we’ll look at some historical cases of […]

Understanding the financial health of a government, company, nonprofit, or individual requires looking at various factors, which are usually classified into stock and flow financial variables. This article looks at the difference between stock and flow variables, and how they are applied to understand and assess the financial standing of various entites.   Key Takeaways […]

What Is Monte Carlo Simulation? Monte Carlo simulation is a method for modeling and analyzing complex systems by using random sampling. It is used in a wide range of fields, including finance and trading, engineering, and science, to model and predict the behavior of systems that may be too complex to be solve analytically. Or […]