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17 Results

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.

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.

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.

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.

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.

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.

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.

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.

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.
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