Prepared as background for the IMF's Integrated Policy Framework, this paper builds a three-period small open economy in which monetary policy, capital inflow controls, sterilized foreign exchange …
PublishedClassicJournal of International EconomicsPublished Nov 2012
Dating extreme capital-flow episodes from gross rather than net flows splits the picture in two -- "surges" and "stops" driven by foreign investors, "flight" and "retrenchment" driven by domestic …
Bank leverage is the linchpin of a risk-taking channel through which monetary policy travels across borders: in a pre-crisis quarterly VAR a tighter US policy rate raises the VIX, lowers broker-dealer …
PublishedClassicHandbook of International EconomicsPublished Jan 1995
The intertemporal approach treats the current account as the outcome of forward-looking saving and investment decisions rather than as a function of relative prices, and this chapter develops it from …
In a small open economy where a risk-averse government borrows from risk-neutral lenders using only non-contingent one-period bonds, default happens in equilibrium and happens in *recessions* -- the …
Online FirstReview of Economic StudiesOnline 23 Jan 2026
Bengui and Coulibaly ask whether the pattern of capital flows observed during the 2021–2023 global monetary tightening cycle — whereby capital flowed from low-inflation to high-inflation countries — …
PublishedReview of Economic StudiesOnline 24 Dec 2025Published Sep 2026
Ferrante and Gornemann study the aggregate and redistributive effects of currency devaluations in emerging market economies, focusing on a feature that prior open-economy HANK models had not jointly …
Across 16 industrial countries whose saving and investment rates are averaged over 1960-74, a one-percentage-point higher ratio of gross domestic saving to GDP comes with roughly nine-tenths of a …
In a multi-country heterogeneous-agent New Keynesian model, debt-financed fiscal transfers eventually raise the world interest rate and are entirely absorbed by foreign lenders, but in the short run a …
Introducing heterogeneous households with realistically high marginal propensities to consume into an otherwise-standard small open economy New Keynesian model creates a powerful real income channel …
Across four econometric approaches and up to 114 borrowing countries, a stronger international funding currency goes with less cross-border bank lending denominated in that currency: a one percentage …
This paper builds a database of international currency exposures for a large panel of countries over 1990-2004 and uses it to construct financially-weighted exchange rate indices, showing that …
PublishedClassicJournal of International EconomicsPublished May 2020
This paper builds a Heterogeneous-Agent New-Keynesian Small Open Model Economy (HANKSOME), calibrated to Hungary's pre-2009 current account boom and sudden-stop reversal, and shows that when …
PublishedJournal of Monetary EconomicsOnline 1 Jan 2026Published Jan 2026
This paper studies the cross-sectional dimension of Fisher's (1933) debt-deflation mechanism as it operates during Sudden Stop crises — episodes characterized by large, abrupt reversals in the current …
PublishedClassicJournal of International EconomicsOnline 13 Nov 2009Published Mar 2010
This paper develops a solution method for dynamic stochastic general-equilibrium open-economy models with portfolio choice -- extending standard first- and second-order perturbation techniques, which …
PublishedQuarterly Journal of EconomicsOnline 12 May 2026Published Jul 2026
The paper extends the Cole-Kehoe (2000) sovereign rollover crisis model to include international reserves and derives the joint optimal management of sovereign debt and reserves in a small open …
PublishedClassicJournal of Financial EconomicsPublished Apr 2021
Macroprudential rules on banks' foreign currency exposure do what they are meant to do -- cross-border FX borrowing by banks falls by roughly a third, and bank stock returns become markedly less …
PublishedClassicJournal of Political Economy MacroeconomicsPublished Mar 2023
This paper builds an open-economy heterogeneous-agent New Keynesian (HANK) model in which households differ not only in income and wealth but in their real integration (tradable vs. nontradable …
A frictionless multi-country model implies no cross-country correlation between long-run savings and investment rates, so the Feldstein-Horioka finding really is a puzzle for it. Neither limited …
A standard small-open-economy business-cycle model, augmented with a collateral constraint that caps total debt -- including within-period working-capital loans -- at a fraction of the market value of …
PublishedClassicReview of Financial StudiesOnline 7 Apr 2020Published Feb 2021
Identifying US monetary policy shocks from daily moves in five-year Treasury futures around FOMC announcements, this paper shows that during the unconventional-policy years those shocks largely …
Six of international macroeconomics' most stubborn puzzles -- home bias in trade, Feldstein-Horioka, home bias in equity portfolios, low consumption correlations, the slow mean reversion of real …