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...

The rapid increase in global liquidity and the large-scale net capital flows to emerging countries have raised serious concerns about adverse effects on the recipient countries; these include the danger of overheating, exchange rate appreciation pressures, inflationary pressure on consumer and...

The recent European economic crisis has dramatically exposed the failures of the various institutional mechanisms in place to maintain economic stability in Europe, and has unveiled the difficulty in achieving international coordination on fiscal and financial stability policies. Drawing on the...

More than 6 years has passed since the 2001 Financial Crisis & Banking Crisis in Turkey. During the analysis of this paper many people were asking when the next crisis will be hitting Turkey. 2008-9 Mortgage Crisis (Banking Crisis) in the West has some similarities to the Turkish Banking crisis....

This paper explores the consequences of extremely low real interest rates in a world with integrated but heterogenous capital markets and nominal rigidities. We establish four main results: (i) Liquidity traps spread to the rest of the world through the current account, which we illustrate with...

Recent financial market reform undertaken by East Asian policymakers has focused on facilitating corporate bond market development. McCauley and Park (2006) note that this vision encompasses three perspectives: a regional bond market denominated in regional currencies; a series of domestic...

Using a unique high-frequency futures dataset, we characterize the response of U.S., German and British stock, bond and foreign exchange markets to real-time U.S. macroeconomic news. We find that news produces conditional mean jumps; hence high-frequency stock, bond and exchange rate dynamics...

Using a unique high-frequency futures dataset, we characterize the response of U.S., German and British stock, bond and foreign exchange markets to real-time U.S. macroeconomic news. We find that news produces conditional mean jumps; hence high-frequency stock, bond and exchange rate dynamics...

Three of the most important recent facts in global macroeconomics - the sustained rise in the US current account deficit, the stubborn decline in long run real rates, and the rise in the share of US assets in global portfolio - appear as anomalies from the perspective of conventional wisdom and...

Empirical evidence shows that observed macroeconomic fundamentals have little explanatory power for nominal exchange rates (the exchange rate determination puzzle). On the other hand, the recent microstructure approach to exchange rates has shown that most exchange rate volatility at short to...