Central banks actively engage in sterilized foreign exchange market intervention despite numerous empirical studies indicating that these operations do not systematically affect the exchange rate. Are these policies misguided and central bankers irrational? Or is evidence showing the...

Recent trends suggest the world economy may be tending towards an equilibrium with two distinct trading blocs, each internally integrated, but with significant isolation between the blocs. This paper uses a quantitative theory to explore how far this bifurcation would need to go to pose a threat...

This paper investigates the spread of what started as a crisis at the core of the global financial system to emerging economies. While emerging economies had exhibited some resilience through the early stages of the financial turmoil that began in the summer of 2007, they have been hit hard...

Tiny changes in the American monetary policy can have dramatic effects on the rest of the world because of dollar's double role of national and international currency. This is the Triffin dilemma. The paper shows how it works through three examples: price of commodities, dollarization, and the...

The purpose of this paper is to put the future of the US dollar into a logical framework which comprises the global development mechanism. Two models of growth collide: the US 'locomotive,' based on the international use of the dollar, and which requires exogenous pushes coming permanently from...

We study the effects of short- and longer-term U.S. interest rates on risk taking in the global market for U.S. dollar syndicated term loans. Because banks tend to originate these loans with intent to sell to non-bank investors, we examine risk taking by the broad financial system. To the extent...

Both academic researchers and policymakers posit a unique role for the US in the inter-national financial system. This paper investigates the characteristics and determinants of US cross-border financial flows and examines how these contrast with those of the rest of the world. We analyse the...

Public pension funds are, by far, the world's preeminent asset owners, with more than $ 25 trillions in combined assets. The largest pension funds are found in the United States, Canada, Australia, Japan, the Netherlands and the UK ("pension superpowers"). How they are managed, their funding...