F44 - International Business Cycles

• International Portfolio Rebalancing and Fiscal Policy Spillovers

  Staff Working Paper 2023-56 Sami Alpanda, Uluc Aysun, Serdar Kabaca

  We evaluate, both empirically and theoretically, the spillover effects that debt-financed fiscal policy interventions of the United States have on other economies. We consider a two-country model with international portfolio rebalancing effects. We show that US fiscal expansions would increase global long-term rates and hinder economic activity in the rest of the world.

  Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Fiscal policy, International topics JEL Code(s): E, E3, E32, E6, E62, F, F4, F41, F44

• The Macroeconomic Effects of Portfolio Equity Inflows

  Staff Working Paper 2023-31 Nick Sander

  I provide evidence that portfolio equity inflows can have expansionary effects on GDP and inflation if not offset by monetary policy. I use a shift-share instrument to estimate equity inflows based on plausibly exogenous timing of inflows into mutual funds with heterogeneous country portfolios.

  Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, International financial markets, International topics, Monetary policy JEL Code(s): E, E3, E32, F, F3, F32, F4, F44

• Risk Amplification Macro Model (RAMM)

  Technical Report No. 123 Kerem Tuzcuoglu

  The Risk Amplification Macro Model (RAMM) is a new nonlinear two-country dynamic model that captures rare but severe adverse shocks. The RAMM can be used to assess the financial stability implications of both domestic and foreign-originated risk scenarios.

  Content Type(s): Staff research, Technical reports Topic(s): Business fluctuations and cycles, Econometric and statistical methods, Financial stability, Monetary policy transmission JEL Code(s): C, C5, C51, E, E3, E37, E4, E44, F, F4, F44

• International Transmission of Quantitative Easing Policies: Evidence from Canada

  Staff Working Paper 2022-30 Serdar Kabaca, Kerem Tuzcuoglu

  This paper examines the cross-border spillovers from major economies’ quantitative easing (QE) policies to their trading partners. We concentrate on spillovers from the US to Canada during the zero lower bound period when QE policies were actively used.

  Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, International topics, Monetary policy transmission JEL Code(s): E, E5, E52, F, F4, F41, F44

• Monetary Policy and Redistribution in Open Economies

  Staff Working Paper 2022-6 Xing Guo, Pablo Ottonello, Diego Perez

  We study how different types of monetary policy shape the distributional effects of external economic shocks on households’ consumption in a small open economy. Our results present a trade-off between maintaining overall stabilization and controlling consumption inequality.

  Content Type(s): Staff research, Staff working papers Topic(s): Exchange rate regimes, Monetary policy JEL Code(s): E, E3, E32, E5, E52, F, F4, F41, F44

• Fiscal Spillovers: The Case of US Corporate and Personal Income Taxes

  Staff Working Paper 2021-41 Madeline Hanson, Daniela Hauser, Romanos Priftis

  How do changes to personal and corporate income tax rates in the United States affect its trading partners? Spillover effects from cuts in the two taxes differ. They are generally small and negative for corporate taxes, but sizable and positive for personal income taxes.

  Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Econometric and statistical methods, Exchange rate regimes, Fiscal policy, International topics JEL Code(s): E, E3, E32, E6, E62, F, F4, F44, H, H2, H20

• The Anatomy of Sentiment-Driven Fluctuations

  Staff Working Paper 2021-33 Sushant Acharya, Jess Benhabib, Zhen Huo

  We show that changes in sentiment that aren’t related to fundamentals can drive persistent macroeconomic fluctuations even when all economic agents are rational. Changes in sentiment can also affect how fundamental shocks affect macroeconomic outcomes.

  Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Economic models JEL Code(s): E, E2, E20, E3, E32, F, F4, F44

• The Extensive Margin of Trade and Monetary Policy

  Staff Working Paper 2018-37 Yuko Imura, Malik Shukayev

  This paper studies the effects of monetary policy shocks on firms’ participation in exporting. We develop a two-country dynamic stochastic general equilibrium model in which heterogeneous firms make forward-looking decisions on whether to participate in the export market and prices are staggered across firms and time.

  Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Economic models, Firm dynamics, International topics, Monetary policy JEL Code(s): E, E5, E52, F, F1, F12, F4, F44

• Modeling Fluctuations in the Global Demand for Commodities

  Staff Working Paper 2018-4 Lutz Kilian, Xiaoqing Zhou

  It is widely understood that the real price of globally traded commodities is determined by the forces of demand and supply. One of the main determinants of the real price of commodities is shifts in the demand for commodities associated with unexpected fluctuations in global real economic activity.

  Content Type(s): Staff research, Staff working papers Topic(s): Econometric and statistical methods, International topics JEL Code(s): F, F4, F44, Q, Q1, Q11, Q3, Q31, Q4, Q41, Q43

• 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