Search Results

Showing results 1 to 10 of approximately 63.

(refine search)
SORT BY: PREVIOUS / NEXT
Jel Classification:F4 

Working Paper
No Credit, No Gain: Trade Liberalization Dynamics, Production Inputs, and Financial Development

We study the role of financial development on the aggregate and welfare implications of reducing import tariffs on capital and intermediate inputs. We document that financially underdeveloped economies feature a slower aggregate response following trade liberalization. We set up a quantitative general equilibrium model with heterogeneous firms subject to collateral constraints and estimate it to match salient features from Colombian plant-level data. Our model explains a substantial fraction of the differences in the empirical responses of GDP, consumption, and capital across economies with ...
Working Papers , Paper 2020-038

Working Paper
Managing Capital Flows in the Presence of External Risks

We introduce external risks, in the form of shocks to the level and volatility of world interest rates, into a small open economy model subject to the risk of sudden stops?large recessions together with abrupt reversals in capital inflows| and characterize optimal macroprudential policy in response to these shocks. In the model, collateral constraints create a pecuniary externality that leads to "overborrowing" and sudden stops that arise when the constraints bind. The typical sudden stop generated by the model replicates existing empirical evidence for emerging market economies: Low and ...
International Finance Discussion Papers , Paper 1213

Working Paper
No Credit, No Gain: Trade Liberalization Dynamics, Production Inputs, and Financial Development

We study the role of financial development on the aggregate and welfare implications of reducing trade barriers on imports of physical capital and intermediate inputs. We document that financially underdeveloped economies feature a slower response of real GDP, consumption, and investment following trade liberalization episodes that improve access to imported production inputs. To quantify the role of financial development, we set up a quantitative general equilibrium model with heterogeneous firms subject to financial constraints and estimate it to match salient features from Colombian ...
Working Papers , Paper 2020-038

Working Paper
The effects of government spending on real exchange rates: evidence from military spending panel data

Using panel data on military spending for 125 countries, we document new facts about the effects of changes in government purchases on the real exchange rate, consumption, and current accounts in both advanced and developing countries. While an increase in government purchases causes real exchange rates to appreciate and increases consumption significantly in developing countries, it causes real exchange rates to depreciate and decreases consumption in advanced countries. The current account deteriorates in both groups of countries. These findings are not consistent with standard ...
Working Papers , Paper 16-14

Working Paper
The few leading the many: foreign affiliates and business cycle comovement

This paper uses microdata on balance sheets, trade, and the nationality of ownership of firms in France to investigate the effect of foreign multinationals on business cycle comovement. We first show that foreign affiliates, which represent a tiny fraction of all firms, are responsible for a high share of employment, value added, and trade both at the national and at the regional levels. We also show that the distribution of foreign affiliates across regions differs with the nationality of the parent. We then show that foreign affiliates increase the comovement of activities between their ...
Globalization Institute Working Papers , Paper 116

Report
The Interaction and Sequencing of Policy Reforms

In what order should a developing country adopt policy reforms? Do some policies complement each other? Do others substitute for each other? To address these questions, we develop a two-country dynamic general equilibrium model with entry and exit of firms that are monopolistic competitors. Distortions in the model include barriers to entry of firms, barriers to international trade, and barriers to contract enforcement. We find that a reform that reduces one of these distortions has different effects depending on the other distortions present. In particular, reforms to trade barriers and ...
Staff Report , Paper 521

Working Paper
International Diversification, Reallocation, and the Labor Share

How does growing international financial diversification affect firm-level and aggregate labor shares? We study this question using a novel framework of firm labor choice in the face of aggregate risk. The theory implies a cross-section of labor risk premia and labor shares that appear as markups in firm-level data. International risk sharing leads to a reallocation of labor towards riskier/low labor share firms alongside a rise in within-firm labor shares, matching key micro-level facts. We use cross-country firm-level data to document a number of empirical patterns consistent with the ...
Working Paper Series , Paper WP 2023-16

Working Paper
Financial Development and Trade Liberalization

We study the role of financial development on the aggregate effects and welfare implications of reducing international trade barriers on production inputs such as physical capital and intermediates. We document that financially underdeveloped economies feature a slower response of real GDP, consumption, and investment following trade liberalization episodes that improve access to imported production inputs. We set up a quantitative general equilibrium model with heterogeneous firms subject to financial constraints and estimate it to match salient features from Colombian plant-level data. We ...
Working Papers , Paper 2020-038

Working Paper
Interest Rate Volatility and Sudden Stops : An Empirical Investigation

Using a multi-country regime-switching vector autoregressive (VAR) model we document the existence of two regimes in the volatility of interest rates at which emerging economies borrow from international financial markets, and study the statistical relationship of such regimes with episodes of sudden stops. Periods of high volatility tend to be persistent and are associated with high interest rates, the occurrence of sudden stops in external financing, and large declines in economic activity. Most strikingly, we show that regime switches drive the countercyclicality of interest rates in ...
International Finance Discussion Papers , Paper 1209

Working Paper
Financial Frictions and Export Dynamics in Large Devaluations

We study the role of financial frictions and balance-sheet effects in accounting for the dynamics of aggregate exports in large devaluations. We investigate a small open economy with heterogeneous firms and endogenous export decisions in which firms face financing constraints and debt can be denominated in foreign units. Despite the negative impact of these channels on capital accumulation and output at the firm-level, we find that they only explain a modest fraction of the gradual increase of exports observed in these episodes. Exports increase since financially-constrained exporters are ...
Working Papers , Paper 2017-13

FILTER BY year

FILTER BY Content Type

FILTER BY Author

Leibovici, Fernando 10 items

Davis, J. Scott 9 items

Kohn, David 8 items

Szkup, Michal 7 items

Goldberg, Linda S. 6 items

Kollmann, Robert 5 items

show more (96)

FILTER BY Jel Classification

F3 32 items

F1 13 items

E3 12 items

E5 10 items

E2 8 items

show more (52)

FILTER BY Keywords

welfare 7 items

exchange rates 7 items

financial development 5 items

trade liberalization 5 items

COVID-19 4 items

global financial cycle 4 items

show more (159)

PREVIOUS / NEXT