This paper reviews and critically evaluates the empirical literature on the effects of U.S. unconventional monetary policy on both financial markets and the real economy. In order to understand how such policies could work, we also briefly review the literature on the theory of such policies.
Developing countries frequently offer tax incentives and even subsidize the entry and operation of foreign firms. I examine the optimality of such policies in an economy where growth is driven by entrepreneurial know-how, a skill that is continuously updated on the basis of the productive ideas implemented in the country.
Trade data are typically reported at the level of regions or countries and are therefore
aggregates across space. In this paper, we investigate the sensitivity of standard
gravity estimation to spatial aggregation.
We provide new empirical evidence of a relationship between asset prices and trade-
Induced international R&D spillovers; in particular, we find that pairs of countries
that share more research and development exhibit more highly correlated stock market
returns and less volatile exchange rates.
Empirical work on asset prices suggests that pricing kernels have to be almost perfectly correlated across countries. If they are not, real exchange rates are too smooth to be consistent with high Sharpe ratios in asset markets.
Are production factors allocated efficiently across countries? To differentiate misallocation from factor intensity differences, we construct a new dataset of estimates for the output shares of natural resources for a large panel of countries.
Consider the following facts. In 1950, the richest countries attained an average of 8 years
of schooling whereas the poorest countries 1.3 years, a large 6-fold difference. By 2005, the
difference in schooling declined to 2-fold because schooling increased faster in poor than in
Countries that trade more with each other tend to have more correlated business cycles. Yet,
traditional international business cycle models predict a much weaker link between trade and
business cycle comovement.
Latin America has had striking changes in economic performance over time. Following the
recession and debt crises of the early 1980’s, consumption declined for about ten years and consumption per-capita in the year 2004 was roughly the same as it was in 1980.
This paper extends the previous literature on geographic (heat waves) and intertemporal
(meteor showers) foreign exchange volatility transmission to characterize the role of jumps and
Academic studies show that technical trading rules would have earned substantial excess returns over long periods in foreign exchange markets. However, the approach to risk adjustment has typically been rather cursory.
Reflecting upon recent enforcement policy activism of US states and countries within the EU
towards unauthorized workers, we examine the overlap of centralized (federal) and decentralized
(state or regional) enforcement of immigration policies in a spatial context.
In this paper we show that price equalization does not imply zero barriers to trade.
There are many barrier combinations that deliver price equalization, but each combination
implies a different volume of trade.