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The "Other" Imbalance and the Financial Crisis
Caballero, Ricardo J. - 2010
the U.S. would experience a sudden stop of capital flows, which would unavoidably drag the world economy into a deep … instead that the root imbalance was of a different kind: The entire world had an insatiable demand for safe debt instruments … of exposing the economy to a systemic panic. This structural problem can be alleviated if governments around the world …
Persistent link: https://www.econbiz.de/10013149302
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An Equilibrium Model of "Global Imbalances" and Low Interest Rates
Caballero, Ricardo J. - 2009
the world and, b) heterogeneity in these regions' capacity to generate financial assets from real investments. In …
Persistent link: https://www.econbiz.de/10012767437
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Financial Crash, Commodity Prices and Global Imbalances
Caballero, Ricardo J.; Farhi, Emmanuel; Gourinchas, … - 2021
In this paper we argue that the persistent global imbalances, the subprime crisis, and the volatile oil and asset prices that followed it, are tightly interconnected. They all stem from a global environment where sound and liquid financial assets are in scarce supply
Persistent link: https://www.econbiz.de/10013243462
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International Liquidity Management : Sterilization Policy in Illiquid Financial Markets
Caballero, Ricardo J.; Krishnamurthy, Arvind - 2021
During the booms that precede crises in emerging economies, policy makers often struggle to limit capital flows and their expansionary consequences. The main policy tool for this task is sterilization - essentially a swap of international reserves for public bonds. However, there is an extensive...
Persistent link: https://www.econbiz.de/10013245510
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On the Global Impact of Risk-Off Shocks and Policy-Put Frameworks
Caballero, Ricardo J. - 2019
Global risk-off shocks can be highly destabilizing for financial markets and, absent an adequate policy response, may trigger severe recessions. Policy responses were more complex for developed economies with very low interest rates after the Global Financial Crisis (GFC). We document, however,...
Persistent link: https://www.econbiz.de/10012867100
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Global Imbalances and Policy Wars at the Zero Lower Bound
Caballero, Ricardo J. - 2015
This paper explores the consequences of extremely low real interest rates in a world with integrated but heterogenous … capital markets and nominal rigidities. We establish four main results: (i) Liquidity traps spread to the rest of the world …
Persistent link: https://www.econbiz.de/10013013171
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Inflation Targeting and Sudden Stops
Caballero, Ricardo J.; Krishnamurthy, Arvind - 2021
Emerging economies experience sudden stops in capital inflows. As we have argued in Caballero and Krishnamurthy (2002), having access to monetary policy during these sudden stops is useful, but mostly for insurance' rather than for aggregate demand reasons. In this environment, a central bank...
Persistent link: https://www.econbiz.de/10013237236