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Capital controls or exchange rate policy? A pecuniary externality perspective

Benigno, Gianluca; Chen, Huigang; Otrok, Christopher; … - London School of Economics (LSE) - 2012

In the aftermath of the global financial crisis, a new policy paradigm has emerged in which old-fashioned policies such as capital controls and other government distortions have become part of the standard policy toolkit (the so-called macro-prudential policies). On the wave of this seemingly...

Persistent link: https://www.econbiz.de/10010744815

Capital flows and asset prices

Aoki, Kosuke; Benigno, Gianluca; Kiyotaki, Nobuhiro - London School of Economics (LSE) - 2009

After liberalizing international transactions of financial assets, many countries experience large swings in asset prices, capital flows, and aggregate production. This paper studies how the adjustment to capital account liberalization depends upon the degree of development of a domestic...

Persistent link: https://www.econbiz.de/10010745119

Optimal policy for macro-financial stability

Benigno, Gianluca; Chen, Huigang; Otrok, Chris; … - London School of Economics (LSE) - 2012

In this paper we study whether policy makers should wait to intervene until a financial crisis strikes or rather act in a preemptive manner. We study this question in a relatively simple dynamic stochastic general equilibrium model in which crises are endogenous events induced by the presence of...

Persistent link: https://www.econbiz.de/10010746636

Public opinion and the crisis: the dynamics of support for the euro

Hobolt, Sara B.; Wratil, Christopher - London School of Economics (LSE) - 2015

and the subsequent euro area crisis have amplified both the salience and the redistributive consequences of decisions …. Interestingly, our results show that support for the euro has remained high within the euro area; however, attitudes are … seen to deepen divisions within Europe, our findings suggest that it has also encouraged citizens in the euro area to form …

Persistent link: https://www.econbiz.de/10011265670

Do workers' remittances reduce the probability of current account reversals?

Bugamelli, Matteo; Paterno, Francesco - London School of Economics (LSE) - 2006

The paper combines the literature on financial crises in emerging markets and developing economies with that on international migrations by investigating whether the increasingly large flows of workers’ remittances can help reduce the probability of current account reversals. The rationale for...

Persistent link: https://www.econbiz.de/10010745682

The financial resource curse

Benigno, Gianluca; Fornaro, Luca - London School of Economics (LSE) - 2013

This paper presents a model of financial resource curse, i.e. episodes of abundant access to foreign capital coupled with weak productivity growth. We study a two-sector, tradable and non-tradable, small open economy. The tradable sector is the engine of growth, and productivity growth is...

Persistent link: https://www.econbiz.de/10010746513

Political credit cycles: the case of the Euro zone

Fernández-Villaverde, Jesús; Garicano, Luis; Santos, … - London School of Economics (LSE) - 2013

We study the mechanisms through which the adoption of the Euro delayed, rather than advanced, economic reforms in the … Euro zone periphery and led to the deterioration of important institutions in these countries. We show that the abandonment … process after the creation of the Euro. …

Persistent link: https://www.econbiz.de/10011126656

Growth and the quality of foreign direct investment: is all FDI equal?

Alfaro, Laura; Charlton, Andrew - London School of Economics (LSE) - 2007

In this paper we distinguish different “qualities” of FDI to re-examine the relationship between FDI and growth. We use ‘quality’ to mean the effect of a unit of FDI on economic growth. However this is difficult to establish because it is a function of many different country and project...

Persistent link: https://www.econbiz.de/10011071122

Monetary policy under alternative asset market structures: the case of a small open economy

De Paoli, Bianca - London School of Economics (LSE) - 2009

Can the structure of asset markets change the way monetary policy should be conducted? Following a linear-quadratic approach, the present paper addresses this question in a New Keynesian small open economy framework. Our results reveal that the configuration of asset markets significantly...

Persistent link: https://www.econbiz.de/10010884723

Human capital and international portfolio choice

Julliard, Christian - London School of Economics (LSE) - 2004

This paper shows that in a non-representative agent model in which households face short selling constraints and labor income risk, in the form of both uninsurable shocks and a common aggregate component, small differences in the correlation between aggregate labor income shocks and domestic and...

Persistent link: https://www.econbiz.de/10010928808