I adapt the framework of Sauzet (2021) to an international setting to characterize the global solution to the international portfolio problem in full generality, a long-standing open issue in international finance. In this two-country, two-good environment, investors have recursive preferences...

I study the joint dynamics between the US wealth share, the dollar and the global economy. I uncover three novel stylised facts about these joint dynamics. Firstly, the US wealth share is countercyclical: it falls on impact but subsequently rises over the course of global recessions. Secondly...

Since the introduction of the Structural Adjustment Programs and subsequent World Bank and the IMF economic adjustment initiatives, there have been increasing concerns about their economic impacts in developing countries. The commonplace concern is that the Neo-liberal economic philosophies of...

This paper investigates the link between Bitcoin and macroeconomic fundamentals by estimating the impact of macroeconomic news on Bitcoin using an event study with intraday data. The key result is that, unlike other U.S. asset classes, Bitcoin is orthogonal to monetary and macroeconomic news....

What is the current state of sovereign credit risk across Euro zone? Does the recent fiscal crisis extend to other (non Euro zone) countries? Is Greece the center of the problem? How did the current fiscal crisis in the Euro area start? Who is behind it? Why can it evolve? How can it be...

Micro-based exchange-rate research examines the determination and behavior of spot exchange rates in an environment that replicates the key features of trading in the foreign exchange (FX) market. Traditional macro exchange-rate models play little attention to how trading in the FX market...

Regional and bilateral liquidity arrangements have gained increasing prominence over the past decades, not least during the recent global financial crisis. This has important consequences for the role of the International Monetary Fund (IMF) as a crisis lender and raises questions regarding the...

We use changes in Brazil's tax on capital inflows from 2006 to 2011 to test for direct portfolio effects and externalities from capital controls on investor portfolios. The analysis is structured based on information from investor interviews. We find that an increase in Brazil's tax on foreign...

Mismatches between the supply and the demand of safe financial assets in fast-growing emerging countries have been singled out by economic theory as drivers of international capital flows and, ultimately, global current account imbalances. This paper assesses empirically the contribution of the...