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Working Paper
The Dollar Channel of Monetary Policy Transmission
This paper documents a new dollar channel that transmits monetary policy across borders. Exploiting unique features of the syndicated loan market for identification, we show that changes in the euro-dollar exchange rate around ECB monetary policy announcements that are orthogonal to simultaneous changes in euro-area interest rates and stock prices affect U.S. leveraged loan spreads. Specifically, in response to dollar appreciation, investors require higher compensation for risk, and borrowing costs for U.S. firms increase. These findings imply a causal link between the U.S. dollar and ...
Working Paper
Banking and the political support for dollarization
In this paper we study dollarization as a commitment device that the Central Bank could use to avoid getting involved in an undesirable banking-sector bailout. We show how a political process could induce an equilibrium outcome that differs from the one that a benevolent Central Bank would want to implement. Dollarization then could be used to restore the economy to the benevolent outcome. In so doing though, political support for dollarization becomes essential. For our benchmark case, dollarization does not have enough support to be actually implemented. But when we study the interaction ...
Journal Article
Dollars, deficits, and the international monetary system
Working Paper
The Dollar and Emerging Market Economies: Financial Vulnerabilities Meet the International Trade System
This paper shows that dollar appreciations lead to declines in GDP, investment, and credit to the private sector in emerging market economies (EMEs). These results imply that the transmission of dollar movements to EMEs occurs mainly through financial conditions rather than net exports, contrary to what would be expected from the conventional Mundell-Fleming model. Moreover, the central role of the U.S. dollar in global trade invoicing and financing - the dominant currency paradigm - and the increased integration of EMEs into international supply chains weaken the traditional trade channel. ...
Journal Article
Report outlines new efforts to combat counterfeiting abroad
Journal Article
Alternative small dollar loans: creating sound financial products through innovation and regulation
Low- to moderate-income borrowers need alternatives to payday loans to meet their short-term credit needs. This article provides an overview of consumer demand for smaller loans, and discusses how and why mainstream financial institutions should offer less costly alternatives to traditional payday loans. A two-year FDIC pilot, a smalldollar loan pool in Baltimore, and individual case studies suggest that such lending can be viable and profitable. The article concludes with recommendations for how financial institutions and regulators should support this effort.
Journal Article
President's perspective
Journal Article
The cause of the dollar depreciation
An abstract for this article is not available
Journal Article
Improving America's competitiveness
Go metric and remove barriers to nationwide branch banking: these are the best ways to improve U.S. export performance in world markets.
Journal Article
Foreign gold and dollar holdings in 1949