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The international monetary and financial system: its Achilles heel and what to do about it

BORIO, Claudio - Federal Reserve Bank of Dallas - 2014

This essay argues that the Achilles heel of the international monetary and financial system is that it amplifies the “excess financial elasticity” of domestic policy regimes, ie it exacerbates their inability to prevent the build-up of financial imbalances, or outsize financial cycles, that...

Persistent link: https://www.econbiz.de/10011114878

The international monetary and financial system: a capital account perspective

BORIO, Claudio; James, Harold; Shin, Hyun Song - Federal Reserve Bank of Dallas - 2014

In analysing the performance of the international monetary and financial system (IMFS), too much attention has been paid to the current account and far too little to the capital account. This is true of both formal analytical models and historical narratives. This approach may be reasonable when...

Persistent link: https://www.econbiz.de/10011114883

Export shocks and the zero bound trap

Fujiwara, Ippei - Federal Reserve Bank of Dallas - 2010

When a small open economy experiences a sufficiently large negative export shock, it is vulnerable to falling into a zero bound trap. In addition, such a shock can have very large impact on the economy compared to the case when the zero bound is not a binding constraint. This could be one...

Persistent link: https://www.econbiz.de/10008690997

Sharing the burden: monetary and fiscal responses to a world liquidity trap

Cook, David; Devereux, Michael B. - Federal Reserve Bank of Dallas - 2011

With integrated trade and financial markets, a collapse in aggregate demand in a large country can cause "natural real interest rates" to fall below zero in all countries, giving rise to a global "liquidity trap." This paper explores the optimal policy response to this type of shock, when...

Persistent link: https://www.econbiz.de/10009292929

Pricing-to-market and optimal interest rate policy

Cooke, Dudley - Federal Reserve Bank of Dallas - 2014

I study optimal interest rate policy in a small open economy with consumer search in the product market. When there are search frictions, firms price-to-market, with implications for the design of monetary policy. Country-specific shocks generate deviations from the law of one price for traded...

Persistent link: https://www.econbiz.de/10011084958

Do good institutions promote counter-cyclical macroeconomic policies?

Calderón, César; Duncan, Roberto; Schmidt-Hebbel, Klaus - Federal Reserve Bank of Dallas - 2012

The literature has argued that developing countries are unable to adopt counter-cyclical monetary and fiscal policies due to financial imperfections and unfavorable politicaleconomy conditions. Using a world sample of 115 industrial and developing countries for 1984-2008, we find that the level...

Persistent link: https://www.econbiz.de/10011026846

Exchange and interest rate management and the international transmission of disturbances

Cox, W. Michael; McTaggart, Douglas - Federal Reserve Bank of Dallas - 1988

Persistent link: https://www.econbiz.de/10005514289

Keynesian economics without the LM and IS curves: a dynamic generalization of the Taylor-Romer model

Koenig, Evan F. - Federal Reserve Bank of Dallas - 2008

John Taylor and David Romer champion an approach to teaching undergraduate macroeconomics that dispenses with the LM half of the IS-LM model and replaces it with a rule for setting the interest rate as a function of inflation and the output gap - i.e., a Taylor rule. But the IS curve is...

Persistent link: https://www.econbiz.de/10004993781

Can interest rate factors explain exchange rate fluctuations?

Yung, Julieta - Federal Reserve Bank of Dallas - 2014

This paper explores whether interest rate factors, derived from the yield curve, can explain exchange rate fluctuations at different horizons. Using a dynamic term structure model under no-arbitrage, exchange rates are modeled as the ratio of two countries’ stochastic discount factors. Key to...

Persistent link: https://www.econbiz.de/10011114879

Heterogeneous bank lending responses to monetary policy: new evidence from a real-time identification

Bluedorn, John; Bowdler, Christopher; Koch, Christoffer - Federal Reserve Bank of Dallas - 2014

We present new evidence on how heterogeneity in banks interacts with monetary policy changes to impact bank lending, at … both the bank and U.S. state levels. Using an exogenous policy measure identified from narratives on FOMC intentions and … real-time economic forecasts, we find much stronger dynamic effects and greater heterogeneity in U.S. bank lending …

Persistent link: https://www.econbiz.de/10010772615

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