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Trilemmas and Trade-Offs : Living with Financial Globalisation
Obstfeld, Maurice - 2015
This paper evaluates the capacity of emerging market economies (EMEs) to moderate the domestic impact of global financial and monetary forces through their own monetary policies. Those EMEs that are able to exploit a flexible exchange rate are far better positioned than those that devote...
Persistent link: https://www.econbiz.de/10013029952
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Dominant Currency Debt
Eren, Egemen - 2019
We propose a "debt view" to explain the dominant international role of the dollar. We develop an international general equilibrium model in which firms optimally choose the currency composition of their nominal debt. Expansionary monetary policy in downturns prevents Fisherian debt deflation...
Persistent link: https://www.econbiz.de/10012870077
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Financial Globalization, Governance, and the Evolution of the Home Bias
Kho, Bong-Chan - 2015
Despite the disappearance of formal barriers to international investment across countries, we find that the average home bias of US investors towards the 46 countries with the largest equity markets did not fall from 1994 to 2004 when countries are equally weighted but fell when countries are...
Persistent link: https://www.econbiz.de/10012707986
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Recent RMB Policy and Currency Co-Movements
McCauley, Robert N. - 2018
This study investigates how variation in the determinants of the renminbi's daily fixing since the August 2015 exchange rate reform maps on to variation in the co- movement of the renminbi with regional and other emerging market currencies. We first identify three post-reform periods of RMB...
Persistent link: https://www.econbiz.de/10012916966
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An Intermediation-Based Model of Exchange Rates
Malamud, Semyon - 2018
We develop a general equilibrium model with intermediaries at the heart of international financial markets. In our model, intermediaries bargain with their customers and extract rents for providing access to foreign claims. The behavior of intermediaries, by tilting state prices, generates an...
Persistent link: https://www.econbiz.de/10012908612
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FX Intervention and Domestic Credit : Evidence from High-Frequency Micro Data
Hofmann, Boris - 2019
We employ a rarely available high-frequency micro dataset to study the impact of foreign exchange intervention on domestic credit growth. We find that sterilised purchases of dollars by the central bank dampens the flow of new domestic corporate loans in Colombia. Slowing the pace of currency...
Persistent link: https://www.econbiz.de/10012890369
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Safe Assets : Made, Not Just Born
McCauley, Robert N. - 2019
Official reserve managers have a big stake in the debate over safe assets: their portfolios just about define such assets. This paper conveys the message that reserve managers need not worry about a shortage of safe assets. The debate turns first on whether demand for dollar safe assets will...
Persistent link: https://www.econbiz.de/10012891874
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Systematic Monetary Policy and the Forward Premium Puzzle
Tambakis, Demosthenes Nicholas - 2014
Is systematic monetary policy a driver of the forward premium puzzle, i.e. the tendency of high interest-rate currencies to appreciate, thus strongly violating Uncovered Interest Parity (UIP)? We address this question by studying a battery of monetary policy rules in a small open economy that is...
Persistent link: https://www.econbiz.de/10013064800
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Cross-Border Banking and Global Liquidity
Bruno, Valentina - 2014
We investigate global factors associated with bank capital flows. We formulate a model of the international banking system where global banks interact with local banks. The solution highlights the bank leverage cycle as the determinant of the transmission of financial conditions across borders...
Persistent link: https://www.econbiz.de/10013047533
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A Key Currency View of Global Imbalances
Ito, Hiro - 2019
. The dollar zone groups economies that produce well over half of global GDP. The euro zone now includes almost all of … of the DM/euro from northwestern Europe to Europe and beyond.Global imbalances differ from a currency perspective. In the …-alignment of third currencies. What if the renminbi becomes a key currency alongside the dollar and the euro? Already some emerging …
Persistent link: https://www.econbiz.de/10012893452