Digital divide across countries and within countries continues to persist and even increased when the quality of internet connection is considered. The note shows that many governments have not been able to harness the full potential of digitalization. Governments could play important role to...

We estimate a New Keynesian small open economy model which allows for foreign exchange (FX) market frictions and a potential role for FX interventions for a large set of emerging market economies (EMEs) and some inflation targeting (IT) advanced economy (AE) countries serving as a control group....

We use panel quantile regressions to study extreme (rather than average) movements in the distribution of the real effective exchange rate (REER) of small open economies. We document that global uncertainty (VIX) and global financial conditions (U.S. monetary policy) shocks have a strong impact...

This paper explores the dynamic relationship between firm debt and real outcomes using data from 24 European economies over the period of 2000-2018. Based on macro data, it shows that a rise in credit to firms is associated with an increase in employment growth in the short-term, but employment...

We examine fluctuations in crypto markets and their relationships to global equity markets and US monetary policy. We identify a single price component-which we label the "crypto factor"-that explains 80% of variation in crypto prices, and show that its increasing correlation with equity markets...

Unanticipated changes in tax policy are likely to have different macroeconomic effects compared to anticipated changes due to several mechanisms, including fiscal foresight and policy uncertainty. It is therefore important to understand what drives such policy surprises. We explore the nature of...

Climate change poses an unprecedented challenge to the world economy and the global financial system. This paper sets out to understand and quantify the impact of climate mitigation, with a focus on climate-related news, which represents an important information source that investors use to...

The setting of public utility prices involves balancing various competing government policy objectives, from equity concerns to ensuring the financial sustainability of providers and balancing public finances. In practice, public utility pricing often departs significantly from government...

Recent literature has shown that corporate indebtedness affects firm-level investment behavior but not necessarily aggregate business cycles. I argue that interactions among heterogeneous firms play an important role in equilibrium. After a downturn, financially unconstrained firms in...

This paper investigates the impact of fiscal shocks on inflation, using a large panel of 139 countries over the period 1970-2021. First, both headline and core measures of inflation increase in response to expansionary shifts in the fiscal policy stance. Second, we split the sample and observe...