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on Open Economy Macroeconomics |
| By: | Enders, Zeno; Vespermann, David |
| JEL: | F45 F44 E32 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc21:242430&r= |
| By: | Riccardo Degasperi; Seokki Simon Hong; Giovanni Ricco (Departement of Economics - University of Warwick - University of Warwick [Coventry]) |
| Abstract: | We quantify global US monetary policy spillovers by employing a high-frequency identification and big data techniques, in conjunction with a large harmonised dataset covering 30 economies. We report three novel stylised facts. First, a US monetary policy tightening has large contractionary effects onto both advanced and emerging economies. Second, flexible exchange rates cannot fully insulate domestic economies, due to movements in risk premia that limit central banks' ability to control the yield curve. Third, financial channels dominate over demand and exchange rate channels in the transmission to real variables, while the transmission via oil and commodity prices determines nominal spillovers. |
| Keywords: | monetary policy,trilemma,exchange rates,monetary policy spillovers |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03373749&r= |
| By: | Gergely Hudecz (ESM); Edmund Moshammer (ESM); Alexander Raabe (ESM); Gong Cheng (ESM) |
| Abstract: | The question of whether the international monetary and financial system is, or should be, moving toward a more ’multipolar’ character has received much attention in recent years. The euro is the second most important global currency, and the euro area’s economic weight lays a solid foundation for its greater role on financial markets. A stronger international role would benefit not only the euro area but also the global financial system. This paper therefore focuses on the main drivers of the euro’s international role and the policies to support it. The ongoing reforms in the European Economic and Monetary Union can support the common currency on the international scene, and there is scope for further policies that strengthen the role of the euro on international capital markets. |
| Date: | 2021–03–18 |
| URL: | http://d.repec.org/n?u=RePEc:stm:dpaper:16&r= |
| By: | Stéphane Auray; Aurélien Eyquem (UL2 - Université Lumière - Lyon 2) |
| Abstract: | We introduce heterogeneous mark-ups through Bertrand competition in a two-country model with endogenous firms' entry and tradability `a la Ghironi and Melitz (2005). Bertrand competition generates a distribution of mark-ups according to which firms that are larger and more productive charge lower prices, attract larger market shares and extract larger mark-ups. First, we characterize first-best allocations and their implementation. We find that they are inde- pendent from the degree of mark-ups' heterogeneity, suppress the dispersion of mark-ups and imply zero distortions on labor as well as substantial subsidies to preserve firm's incentives to enter. Second, second-best alternative policies with a restricted number of instruments and a balanced budget significantly reduce the potential welfare gains from fiscal policies. Third, the total welfare losses from passive policies are lower under heterogeneous mark-ups than under homogeneous mark-ups: while the dispersion of mark-ups has negative effects on the intensive margin, output per firm, it also raises expected profits for potential entrants and raises the ex- tensive margin, the number of firms in both domestic and export markets, pushing them closer to their efficient levels. Fourth, we also investigate the dynamic properties of allocations under passive and optimal policies considering aggregate productivity shocks and trade liberalization experiments. |
| Keywords: | heterogeneous firms,endogenous entry,open economy,strategic pricing,optimal taxation |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03373701&r= |
| By: | David Kohn; Fernando Leibovici; Michal Szkup |
| Abstract: | This paper reviews recent studies on the impact of financial frictions on international trade. We first present evidence on the relation between measures of access to external finance and export decisions. We then present an analytical framework to analyze the impact of financial frictions on firms' export decisions. Finally, we review recent applications of this framework to investigate the impact of financial frictions on international trade dynamics across firms, industries, and in the aggregate. We discuss related empirical, theoretical, and quantitative studies throughout. |
| Keywords: | financial frictions; international trade; credit constraints; export decisions |
| JEL: | F1 F4 |
| Date: | 2021–07–08 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:93275&r= |