Understanding gross capital flows is increasingly viewed as crucial for both macroeconomic and financial stability policies, but theory is lagging behind many key policy debates. We fill this gap by developing a two-country DSGE model that tracks domestic and cross-border gross positions between...

We study the consequences for business cycles and welfare of introducing an interest-bearing retail CBDC, competing with bank deposits as medium of exchange, into an estimated 2-country DSGE environment. CBDC issuance of 30% of GDP increases output and welfare by around 6% and 2%, respectively....

Understanding gross capital flows is increasingly viewed as crucial for both macroeconomic and financial stability policies, but theory is lagging behind many key policy debates. We fill this gap by developing a two-country DSGE model that tracks domestic and cross-border gross positions between...

This paper proposes a framework to analyze long-term potential growth that combines a simple quantitative model with an investigative approach of ‘growth diagnostics’. The framework is used to forecast potential growth for Cambodia, and to conduct simulations about the main drivers of growth...

This paper assesses financial integration in Asia in terms of risk-sharing benefit versus financial-contagion cost. We construct a new measure of risk sharing based on a term structure model, which allows identification of realized stochastic discount factors. Risk sharing is low in Asia, and...

This paper addresses the measurement issues of systemic risk in the Thai banking sector. The concept of conditional value-at-risk (CoVaR), due to Adrian and Brunnermeier (2008), was used to quantify the level of systemic risk and financial linkages among six major Thai commercial banks over the...

This paper examines how Asian financial linkages with systemic economies have changed over time. After developing a factor model, it estimates Asian financial sensitivities to systemic economies, and then seeks to uncover their key determinants, which include trade and financial linkages, as...

This paper proposes a framework to analyze long-term potential growth that combines a simple quantitative model with an investigative approach of ‘growth diagnostics’. The framework is used to forecast potential growth for Cambodia, and to conduct simulations about the main drivers...

The impending change in the global economic and nancial landscape will have important implications for the making of monetary policy in Thailand. This paper highlights two key challenges and proposes steps that can help strengthen the existing in ation targeting (IT) framework. First, we...