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 reconsider the empirical links between volatility and growth between 1970 and 2007. There is a strong and significant correlation between individual country growth rates and global factors that are arguably exogenous with respect to their economies. The amount of volatility driven by these...

We study a novel policy tool-interest rate uncertainty-that can be used to discourage inefficient capital inflows and to adjust the composition of external account between shortterm securities and foreign direct investment (FDI). We identify the trade-offs faced in navigating between external...

Uncertainty about an economy’s regime can change drastically around a crisis. An imported crisis such as the global financial crisis in the euro area highlights the effect of foreign shocks. Estimating an open-economy nonlinear dynamic stochastic general equilibrium model for the euro area and...

Uncertainty about an economy’s regime can change drastically around a crisis. An imported crisis such as the global financial crisis in the euro area highlights the effect of foreign shocks. Estimating an open-economy nonlinear dynamic stochastic general equilibrium model for the euro area and...

Regional employment volatility is an undesirable phenomenon which describes a strongly fluctuating pattern of employment, thus, "instability" of a local economy. In the literature on this field, much of the attention has been paid to two main issues. First, a group studies has investigated the...

A number of studies have documented a reduction in aggregate macroeconomic volatility beginning in the early 1980s, i.e., the quot;Great Moderation.quot; This paper documents the Great Moderation at the state level, finding significant heterogeneity in the timing and magnitude of states'...

This paper investigates the relationship between fiscal policy and output volatility in Russian regions between 2000 and 2009. System GMM estimation techniques are used to account for potential endogeneity between output volatility and fiscal developments. Our main finding is that fiscal...

This paper explores the transmission of non-capital shocks through banking networks. We develop a methodology to construct non-capital (idiosyncratic) shocks, using labor productivity shocks to large firms. We document a change in the relationship between foreign idiosyncratic shocks and...

Volatility has been one of the most active and successful areas of research in time series econometrics and economic forecasting in recent decades. This chapter provides a selective survey of the most important theoretical developments and empirical insights to emerge from this burgeoning...