In this paper, we argue that the effect of monetary and fiscal policies on the exchange rate depends on the fiscal regime. A contractionary monetary (expansionary fiscal) shock can lead to a depreciation, rather than an appreciation, of the domestic currency if debt is not backed by future...

In this paper, we argue that the effect of monetary and fiscal policies on the exchange rate depends on the fiscal regime. A contractionary monetary (expansionary fiscal) shock can lead to a depreciation, rather than an appreciation, of the domestic currency if debt is not backed by future...

This paper studies the role of exchange rates and dollar invoicing in driving the dynamics of international trade flows. It uses a granular decomposition of trade flows at the bilateral level to highlight a bifurcation, whereby in response to a rise in US interest rates, final goods trade...