Uncertain Fiscal Consolidations Staff Working Paper 2013-26 Huixin Bi, Eric M. Leeper, Campbell Leith The paper explores the macroeconomic consequences of fiscal consolidations whose timing and composition - either tax- or spending-based - are uncertain. Content Type(s): Staff research, Staff working papers Research Topic(s): Economic models, Fiscal policy, Monetary policy and uncertainty JEL Code(s): E, E6, E62, E63, H, H3, H30, H6, H60
Are Product Spreads Useful for Forecasting? An Empirical Evaluation of the Verleger Hypothesis Staff Working Paper 2013-25 Christiane Baumeister, Lutz Kilian, Xiaoqing Zhou Notwithstanding a resurgence in research on out-of-sample forecasts of the price of oil in recent years, there is one important approach to forecasting the real price of oil which has not been studied systematically to date. Content Type(s): Staff research, Staff working papers Research Topic(s): Econometric and statistical methods, International topics JEL Code(s): C, C5, C53, G, G1, G15, Q, Q4, Q43
Is There a Quality Bias in the Canadian CPI? Evidence from Micro Data Staff Working Paper 2013-24 Oleksiy Kryvtsov Rising consumer prices may reflect shifts by consumers to new higher-priced products, mostly for durable and semi-durable goods. I apply Bils’ (2009) methodology to newly available Canadian consumer price data for non-shelter goods and services to estimate how price increases can be divided between quality growth and price inflation. Content Type(s): Staff research, Staff working papers Research Topic(s): Inflation and prices, Potential output JEL Code(s): E, E3, E31, M, M1, M11, O, O4, O47
A Blessing in Disguise: The Implications of High Global Oil Prices for the North American Market Staff Working Paper 2013-23 Ron Alquist, Justin-Damien Guénette We examine the implications of increased unconventional crude oil production in North America. This production increase has been made possible by the existence of alternative oil-recovery technologies and persistently elevated oil prices that make these technologies commercially viable. Content Type(s): Staff research, Staff working papers Research Topic(s): International topics, Recent economic and financial developments JEL Code(s): Q, Q4, Q41, Q43, Q47
The Threat of Counterfeiting in Competitive Search Equilibrium Staff Working Paper 2013-22 Enchuan Shao Recent studies in monetary theory show that if buyers can use lotteries to signal the quality of bank notes, counterfeiting does not occur in a pooling equilibrium. In this paper, I investigate the robustness of this non-existence result by considering an alternative trading mechanism. Content Type(s): Staff research, Staff working papers Research Topic(s): Bank notes JEL Code(s): D, D8, D82, D83, E, E4, E42
Why Do Emerging Markets Liberalize Capital Outflow Controls? Fiscal versus Net Capital Flow Concerns Staff Working Paper 2013-21 Joshua Aizenman, Gurnain Pasricha In this paper, we provide empirical evidence on the factors that motivated emerging economies to change their capital outflow controls in recent decades. Liberalization of capital outflow controls can allow emerging-market economies (EMEs) to reduce net capital inflow (NKI) pressures, but may cost their governments the fiscal revenues that external financial repression generates. Content Type(s): Staff research, Staff working papers Research Topic(s): Debt management, Financial system regulation and policies, International topics, Recent economic and financial developments JEL Code(s): F, F3, F32, G, G1, G15
Money Market Rates and Retail Interest Regulation in China: The Disconnect between Interbank and Retail Credit Conditions Staff Working Paper 2013-20 Nathan Porter, TengTeng Xu Interest rates in China are composed of a mix of both market-determined interest rates (interbank rates and bond yields), and regulated interest rates (retail lending and deposit rates), reflecting China’s gradual process of interest rate liberalization. Content Type(s): Staff research, Staff working papers Research Topic(s): Development economics, Econometric and statistical methods, Financial markets, Monetary policy framework, Monetary policy transmission JEL Code(s): C, C2, C22, E, E4, E43, E5, E52, E58
Business Cycle Effects of Credit Shocks in a DSGE Model with Firm Defaults Staff Working Paper 2013-19 M. Hashem Pesaran, TengTeng Xu This paper proposes a theoretical framework to analyze the relationship between credit shocks, firm defaults and volatility, and to study the impact of credit shocks on business cycle dynamics. Content Type(s): Staff research, Staff working papers Research Topic(s): Business fluctuations and cycles, Credit and credit aggregates, Economic models, Financial institutions JEL Code(s): E, E3, E32, E4, E44, G, G2, G21
Booms and Busts in House Prices Explained by Constraints in Housing Supply Staff Working Paper 2013-18 Narayan Bulusu, Jefferson Duarte, Carles Vergara-Alert We study the importance of supply constraints in explaining the heterogeneity in house price cycles across geographies in the United States. Content Type(s): Staff research, Staff working papers Research Topic(s): Asset pricing, Economic models JEL Code(s): R, R3, R31
Fire-Sale FDI or Business as Usual? Staff Working Paper 2013-17 Ron Alquist, Rahul Mukherjee, Linda Tesar Using a new data set, we examine the characteristics and dynamics of cross-border mergers and acquisitions during emerging-market financial crises, that is, so-called “fire-sale FDI.” Our findings shed fresh light on whether the transactions undertaken during crisis periods differ in fundamental ways from those undertaken during more tranquil periods. Content Type(s): Staff research, Staff working papers Research Topic(s): Financial markets, International financial markets, International topics JEL Code(s): F, F2, F21, G, G0, G01, G3, G34