We study the effects of PPP loans on business competition. We start by introducing temporary cash subsidies into a model of monopolistic competition with differentiated products and heterogeneous production costs. We test the predictions of our model in a sample of U.S. airport hotels for which...

Recently, income balance has been gaining importance in current accounts among many countries. We assess the effect of the real effective exchange rate (REER) on income balance using Japanese data. Our results show that the REER does not affect income balance, both on gross and net basis. We...

The study examines whether the long-run validity of PPP holds in some major advanced and developing economies. The study employed the smooth time-varying cointegration (TVC) and time-varying detrended fluctuation analysis (DFA) methodology and we are not aware of any study that has applied TVC...

Indonesia is extensively promoting Public-Private Partnership (PPP) for infrastructure projects, including in the water sector. However, it is found that it takes two to eight years for water supply system (WSS) PPPs to be procured, likely prompting for higher transaction costs. This research...

We use panel quantile regressions to study extreme (rather than average) movements in the distribution of the real effective exchange rate (REER). Global uncertainty (VIX) and financial conditions (U.S. monetary policy) shocks have a strong impact on the distribution of REER changes, with larger...

We review the literature on multi-horizon currency risk premiums. We show how the multi-horizon implications arise from the classic present-value relationship. We further show how these implications manifest themselves in the interaction between bond and currency risk premiums. This link is...

The rise in inflation since mid-2021 to multi-decade highs presents a worrying trend for households’ financial health, particularly if nominal incomes, or non-inflation adjusted income, of financially vulnerable families lag behind prices. Policymakers have noted that lower income households...

This paper examines the stabilization role of the flexible exchange rate in theface of asymmetric shocks for one of the prominent emerging markets and openeconomies, India, using a sign-identified structural Bayesian vector autoregressionmodel over the post reform period 1996-2019. My results...

We use panel quantile regressions to study extreme (rather than average) movements in the distribution of the real effective exchange rate (REER) of small open economies. We document that global uncertainty (VIX) and global financial conditions (U.S. monetary policy) shocks have a strong impact...