Our friend and colleague Rüdiger Dornbusch passed away before he was able tocomplete his book based on the Munich Lectures in Economics that he gave inNovember 17, 1998, at the Center for Economic Studies of Ludwig-Maximilians-Universität.The lectures contain a fascinating overview of the...

Mismatches between the supply and the demand of safe financial assets in fast-growing emerging countries have been singled out by economic theory as drivers of international capital flows and, ultimately, global current account imbalances. This paper assesses empirically the contribution of the...

The recent European economic crisis has dramatically exposed the failures of the various institutional mechanisms in place to maintain economic stability in Europe, and has unveiled the difficulty in achieving international coordination on fiscal and financial stability policies. Drawing on the...

The global financial crises have had severe impact on various financial markets and the world economies at large. At various points in time during economic recessions, the confidence of the global investors is always sapped while most investors panic for safety. The past ten years especially...

The trade balances of the Euro Area (EA) and of the U.S. have improved markedly after the Global Financial Crisis. This paper quantifies the drivers of EA and U.S. economic fluctuations and external adjustment, using an estimated (1999-2017) three-region (U.S., EA, rest of world) DSGE model with...

A growing share of emerging markets (EMs) uses hybrid versions of inflation targeting that differ from the IT regimes of the OECD countries. Real exchange rate and international reserve changes affect the policy interest rates in commodity countries, aiming to stabilize their real exchange rate...

The strong and volatile rebound of capital inflows, mostly portfolio investments, into emerging economies in the recovery process of the 2008 global financial crisis has brought the issue of capital controls to the forefront once again. The presence of global imbalances and unconventional...

We show that multinational firms transmit shocks across countries through their internal capital markets. We study a credit supply shock to parent firms in Germany. International affiliates outside Germany supported their parents through internal lending, became financially constrained...

In this paper the authors ask whether the Asian financial crisis was unnecessary. They propose rethinking the Asian financial crisis through the relatively new capital account crisis paradigm, originally proposed by Masaru Yoshitomi. The authors argue that this paradigm provides a much more...

China's remarkable run of persistently high growth in recent decades is all the more stunning in light of the country's low levels of financial and institutional development, state-dominated economy, and nondemocratic government. Notwithstanding the inefficient and risky growth model, the...