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We introduce external risks, in the form of shocks to the level and volatility of world interest rates, into a small … interest rates and a persistent rise in their volatility. We solve for the optimal policy and argue that the size of a tax on …. We show quantitatively that these taxes respond to both the level and volatility of interest rates even though optimal …
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We characterise the probability distributions of various categories of gross capital flows conditional on information contained in financial asset prices in a panel of emerging market economies, with a focus on "tail" events. Our framework, based on the quantile regression methodology, allows...
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This paper studies how international capital flows are transmitted from the banking sector to the real sector in a bank-based open economy. The analysis centers on the role of institutions and domestic policies in reducing moral hazard problems and on determining the net benefit of international...
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