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Are We Fragmented Yet? Measuring Geopolitical Fragmentation and Its Causal Effect
Fernández-Villaverde, Jesús; Mineyama, Tomohide; … - National Bureau of Economic Research - 2024
After decades of rising global economic integration, the world economy is now fragmenting. To measure this phenomenon, we introduce an index of geopolitical fragmentation derived from various empirical indicators. This index is developed using a flexible dynamic factor model with time-varying...
Persistent link: https://www.econbiz.de/10014576667
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Near-Rational Equilibria in Heterogeneous-Agent Models : A Verification Method
Kogan, Leonid; Mitra, Indrajit - National Bureau of Economic Research - 2022
We propose a general simulation-based procedure for estimating quality of approximate policies in heterogeneous-agent equilibrium models, which allows to verify that such approximate solutions describe a near-rational equilibrium. Our procedure endows agents with superior knowledge of the future...
Persistent link: https://www.econbiz.de/10013334330
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Global Supply Chain Pressures, International Trade, and Inflation
Di Giovanni, Julian; Kalemli-Ozcan, Sebnem; Silva, Álvaro - National Bureau of Economic Research - 2022
We study the impact of the Covid-19 pandemic on Euro Area inflation and how it compares to the experiences of other … domestic aggregate demand shocks in explaining Euro Area inflation over 2020-21. 4) International trade did not respond to … changes in GDP as strongly as it did during the 2008-09 crisis despite strong demand for goods. These lower trade elasticities …
Persistent link: https://www.econbiz.de/10013334457
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Quantifying the Inflationary Impact of Fiscal Stimulus Under Supply Constraints
Di Giovanni, Julian; Kalemli-Ozcan, Sebnem; Silva, Álvaro - National Bureau of Economic Research - 2023
This paper builds on Baqaee and Farhi (2022) and di Giovanni et al. (2022) to quantify the contribution of fiscal policy on U.S. inflation over the Dec-2019 to June-2022 period. Model calibrations show that aggregate demand shocks explain roughly two-thirds of total model-based inflation, and...
Persistent link: https://www.econbiz.de/10013537784
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Weathering the Storm : Supply Chains and Climate Risk
Castro-Vincenzi, Juanma; Khanna, Gaurav; Morales, Nicolas; … - National Bureau of Economic Research - 2024
We characterize how firms structure supply chains under climate risk. Using new data on the universe of firm-to-firm transactions from an Indian state, we show that firms diversify sourcing locations, and suppliers exposed to climate risk charge lower prices. Our event-study analysis finds that...
Persistent link: https://www.econbiz.de/10014512072
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Trade Wars and the Optimal Design of Monetary Rules
Auray, Stéphane; Devereux, Michael B.; Eyquem, Aurélien - National Bureau of Economic Research - 2024
Monetary rules may have a large effect on the outcome of trade wars if central banks target the CPI inflation rate or more generally changes in the relative price of traded goods. We lay out a two-country open-economy model with sticky prices where countries engage in trade wars. In the presence...
Persistent link: https://www.econbiz.de/10014544729
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U.S. Liquid Government Liabilities and Emerging Market Capital Flows
Lee, Soyean; Engel, Charles - National Bureau of Economic Research - 2024
Empirical work finds that flows of investments from the U.S. and other high income countries to emerging markets increase during times of quantitative easing by the U.S. Federal Reserve, and the reverse movement occurs under quantitative tightening. We offer new evidence to confirm these...
Persistent link: https://www.econbiz.de/10014576601
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Regime Changes and FDI : A Tale of Two Countries – Poland and Israel
Razin, Asaf; Cieślik, Andrzej - National Bureau of Economic Research - 2024
This essay highlights the effects of radical transformations in the liberal characteristics of the regimes on foreign direct investors. To focus on the common patterns in the effects on foreign direct investment, of liberal vs. illiberal regime change, the essay spotlights the tale of two...
Persistent link: https://www.econbiz.de/10014576643
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On the Effectiveness of Foreign Exchange Reserves During the 2021-22 U.S. Monetary Tightening Cycle
Ahmed, Rashad; Aizenman, Joshua; Saadaoui, Jamel; … - National Bureau of Economic Research - 2023
This paper examines the role of foreign exchange (FX) reserves and other fundamental factors in explaining cross-country differences in foreign currency depreciation observed over the 2021-22 Federal Reserve monetary policy tightening cycle that led to a sharp appreciation of the US dollar....
Persistent link: https://www.econbiz.de/10014226132
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The US, Economic News, and the Global Financial Cycle
Boehm, Christoph E.; Kroner, T. Niklas - National Bureau of Economic Research - 2023
We provide evidence for a causal link between the US economy and the global financial cycle. Using intraday data, we show that US macroeconomic news releases have large and significant effects on global risky asset prices. Stock price indexes of 27 countries, the VIX, and commodity prices all...
Persistent link: https://www.econbiz.de/10014247914