F41 - Open Economy Macroeconomics

• Global Trade Flows: Revisiting the Exchange Rate Elasticities

  Staff Working Paper 2017-41 Matthieu Bussière, Guillaume Gaulier, Walter Steingress

  This paper contributes to the debate on the magnitude of exchange rate elasticities by providing a set of price and quantity elasticities for 51 advanced and emerging-market economies. Specifically, for each of these countries we report the elasticity of trade prices and trade quantities on both the export and on the import sides, as well as the reaction of the trade balance.

  Content Type(s): Staff research, Staff working papers Topic(s): Exchange rates, Inflation and prices, International topics JEL Code(s): C, C5, C51, F, F1, F14, F3, F31, F33, F4, F41

• Understanding the Cross‐Country Effects of US Technology Shocks

  Staff Working Paper 2017-23 Thuy Lan Nguyen, Wataru Miyamoto

  Business cycles are substantially correlated across countries. Yet most existing models are not able to generate substantial transmission through international trade. We show that the nature of such transmission depends fundamentally on the features determining the responsiveness of labor supply and labor demand to international relative prices.

  Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Economic models, International topics JEL Code(s): E, E3, E30, F, F4, F41, F44, F6, F62

• Terms-of-Trade and House Price Fluctuations: A Cross-Country Study

  Staff Working Paper 2017-1 Paul Corrigan

  Terms-of-trade shocks are known to be key drivers of business cycles in open economies. This paper argues that terms-of-trade shocks were also important for house price fluctuations in a panel of developed countries over the 1994–2015 period.

  Content Type(s): Staff research, Staff working papers Topic(s): Financial stability, Housing, International topics JEL Code(s): C, C3, C32, E, E3, E32, E5, E51, F, F3, F36, F4, F41

• Quantitative Easing in a Small Open Economy: An International Portfolio Balancing Approach

  Staff Working Paper 2016-55 Serdar Kabaca

  This paper studies the effects of quantitative easing (QE) in a small open economy dynamic stochastic general-equilibrium model with international portfolio balancing. Portfolios are classified as imperfectly substitutable short-term and long-term subportfolios, each including domestic and foreign bonds.

  Content Type(s): Staff research, Staff working papers Topic(s): International topics, Monetary policy transmission JEL Code(s): E, E5, E52, F, F4, F41

• Business Cycles in Small, Open Economies: Evidence from Panel Data Between 1900 and 2013

  Staff Working Paper 2016-48 Thuy Lan Nguyen, Wataru Miyamoto

  Using a novel data set for 17 countries dating from 1900 to 2013, we characterize business cycles in both small developed and developing countries in a model with financial frictions and a common shock structure. We estimate the model jointly for these 17 countries using Bayesian methods.

  Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Economic models, International topics JEL Code(s): E, E1, E13, E3, E32, F, F4, F41, F44

• The Paul Storer Memorial Lecture—Cross-Border Trade Integration and Monetary Policy

  Staff Discussion Paper 2016-20 Stephen S. Poloz

  In this paper we explore the nexus between cross-border trade integration and monetary policy. We first review the evidence that trade liberalization has increased the degree of integration in North America and conclude that, while robust structural inferences remain elusive, there is sufficient supporting evidence for central banks to treat the issue seriously.

  Content Type(s): Staff research, Staff discussion papers Topic(s): Economic models, Monetary policy, Trade integration JEL Code(s): E, E3, E37, E5, F, F1, F4, F41, F6

• The Global Financial Cycle, Monetary Policies and Macroprudential Regulations in Small, Open Economies

  Staff Working Paper 2016-38 Gregory Bauer, Gurnain Pasricha, Rodrigo Sekkel, Yaz Terajima

  This paper analyzes the implications of the global financial cycle for conventional and unconventional monetary policies and macroprudential policy in small, open economies such as Canada. The paper starts by summarizing recent work on financial cycles and their growing correlation across borders.

  Content Type(s): Staff research, Staff working papers Topic(s): Financial stability, Housing, International financial markets, Monetary policy framework JEL Code(s): E, E4, E42, E43, E44, E5, E52, F, F4, F41

• Exchange Rate Fluctuations and Labour Market Adjustments in Canadian Manufacturing Industries

  Staff Working Paper 2015-45 Gabriel Bruneau, Kevin Moran

  We estimate the link between exchange rate fluctuations and the labour input of Canadian manufacturing industries. The analysis is based on a dynamic model of labour demand, and the econometric strategy employs a panel two-step approach for cointegrating regressions.

  Content Type(s): Staff research, Staff working papers Topic(s): Econometric and statistical methods, Exchange rate regimes, Exchange rates, Labour markets, Recent economic and financial developments JEL Code(s): E, E2, E24, F, F1, F14, F16, F3, F31, F4, F41, J, J2, J23

• Domestic and Multilateral Effects of Capital Controls in Emerging Markets

  Staff Working Paper 2015-37 Gurnain Pasricha, Matteo Falagiarda, Martin Bijsterbosch, Joshua Aizenman

  Using a novel data set on capital control actions in 17 emerging-market economies (EMEs) over the period 2001–11, we provide new evidence on domestic and multilateral (or spillover) effects of capital controls.

  Content Type(s): Staff research, Staff working papers Topic(s): Econometric and statistical methods, Financial system regulation and policies, International financial markets, International topics, Monetary policy framework JEL Code(s): F, F3, F32, F4, F41, F42, G, G1, G15

• International Transmission of Credit Shocks in an Equilibrium Model with Production Heterogeneity

  Staff Working Paper 2015-19 Yuko Imura, Julia Thomas

  Many policy-makers and researchers view the recent financial and real economic crises across North America, Europe and beyond as a global phenomenon. Some have argued that this global recession has a common source: the U.S. financial crisis.

  Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Economic models, Financial markets, Financial stability, International topics JEL Code(s): E, E2, E22, E3, E32, E4, E44, F, F4, F41, F44