The authors provide the first evidence that changes in risk-based capital requirements for banks affect the real economy through international trade. Using a natural experiment – mandatory Basel II adoption in its Standardized Approach by all banks in Turkey on July 1, 2012 – they...

Using inter-state banking deregulation in the U.S. as an exogenous experiment, the authors find that a 1% increase in banking integration between U.S. states caused a 0.164-0.184% increase in the foreign exports/domestic shipments ratio for U.S. state level exports in the years 1992-1996. They...

Simple exchange rate models based on economic fundamentals were shown to have a difficulty in beating the random walk when predicting the exchange rates out of sample in the modern floating era. Using methods from machine learning -- sequential adaptive ridge regression -- that prevent...

The authors find evidence supporting the hypothesis that countries at times misreport their eco-nomic data in a strategic manner. Among those suspected are countries with xed exchange rate regimes, high negative net foreign asset positions or negative current account balances, which corroborates...

This paper studies portfolio allocation in the international financial market when investors exhibit ambiguity aversion towards assets issued in foreign locations. Entrepreneurs located in each country have access to a risky technology and want to attract capital. The authors characterize...

Author's abstract. I exhibit a simple and realistic feature of technology and trade costs that influences the partition of manufacturing between the North and South depending on the degree of substitutability of internationally traded inputs in production. <p>In the presence of higher wages in the...</p>