The high volatility of economic growth and financial markets in emerging market economies following large swings in foreign capital flows over the past 10 years highlights their possible related costs. This paper investigates the impact of foreign capital flows on GDP growth surprise (= realized...

We contribute to the question of why some countries are more attractive for foreign direct investment (FDI) than others by constructing a composite measure that describes a host country's attractiveness for receiving FDI. This index considers all identified major, measurable and, for our scope,...

Offshore outsourcing of administrative and technical services has become a mainstream business practice. Increasing commoditization of business services and growing client experience with outsourcing have created a range of competitive service delivery options for client firms. Yet, data from...

We look at the financial markets as represented by a network of agents similar to bond percolation models in physics or epidemiology models. We aim to figure out how an agent based network model can cause perturbations that can cause failures of the traditional economic theory, specifically the...

In this paper we show that in a world where productive investment is allocated according to the CAPM, a fractional reserve banking system that facilitates investing and money creation is not Pareto efficient and leads to excessive productive investment that in turn amplifies future business...

We analyze optimal monetary policy in a model with two distinct financial frictions. First, borrowing is subject to collateral constraints. Second, credit flows are intermediated by monopolistically competitive banks, thus giving rise to endogenous lending spreads. We show that, up to a second...

Financial instability and liquidity management by banks is often the most debated topic in the area of monetary economics. This study examines an emerging economy's banking system and contributes to the evolving body of literature on the topic of banks' borrowing behaviour during financial...

Using BoC-GEM-Fin, a large-scale DSGE model with real, nominal and financial frictions featuring a banking sector, we explore the macroeconomic implications of various types of countercyclical bank capital regulations. Results suggest that countercyclical capital requirements have a significant...

We propose and test an alternative explanation for the existence of the positive governance-return relation in the 1990s and its disappearance in the 2000s: The governance-return relation is procyclical. Corporate governance mitigates investment distortions so that firms with strong governance...

We propose and test an alternative explanation for the existence of the positive governance-return relation in the 1990s and its disappearance in the 2000s: The governance-return relation is positive under good states of the economy and negative under bad states. Corporate governance mitigates...