Handbook of international economics / Gita Gopinath [and five others], editors.

Format:

Book

Contributor:

Gopinath, Gita, 1971- editor.

Language:

English

Subjects (All):

International economic relations.

International economic relations--21st century.

Physical Description:

1 online resource (370 pages)

Place of Publication:

Amsterdam, Netherlands : Elsevier, [2022]

Summary:

Handbook of International Economics, Sixth Edition provides a definitive reference for researchers and advanced graduate students. The book includes self-contained surveys of the current state of a branch of economics in the form of chapters prepared by leading specialists. These surveys summarize not only received results but also newer developments from journal articles and discussion papers. Chapters cover The Global Financial Cycle, Dominant Currency Paradigm: a review, Rethinking exchange rate regimes, CIP deviations, the dollar, and frictions in international capital markets, International macroeconomics with imperfect financial markets, The prudential use of capital controls and foreign currency reserves, and Financial crises: a survey.- Provides the authority and expertise of leading contributors from an international board of authors- Presents the latest release in the Handbook of International Economics series- Includes self-contained surveys of the current state of a branch of economics in the form of chapters prepared by leading specialists

Contents:

Front Cover

Handbook of International Economics: International Macroeconomics, Volume 6

Copyright

Contents

Contributors

Introduction to the series

Preface

References

1 The Global Financial Cycle

1 Introduction

2 Empirical evidence on global factors

2.1 Global factor in risky asset prices

2.2 Global factors in capital flows and private sector credit

3 What is behind the Global Financial Cycle?

3.1 Capital flows &amp

risk

3.2 Transmission of US monetary policy across borders

3.3 Transmission of the European Central Bank monetary policy across borders

3.4 Transmission of the Bank of England monetary policy across borders

3.5 Transmission of the People's bank of China monetary policy across borders

4 Has the Global Financial Cycle changed after Lehman?

4.1 Fed unconventional monetary policy &amp

Global Financial Cycle

4.2 ECB unconventional monetary policy &amp

5 Models of the Global Financial Cycle

6 Global Financial Cycle, monetary and macroprudential policies: a research agenda

2 Dominant Currency Paradigm: a review

2 Empirical evidence

2.1 Invoicing shares in global trade

2.2 Currency of invoicing and ERPT

2.3 Co-movement between terms of trade and exchange rates

2.4 Trade elasticity, expenditure switching, and currency of invoicing

3 Asymmetry in the transmission of shocks

4 Optimal monetary policy

5 Currency choice

5.1 Theory: how is invoicing currency chosen?

5.2 Empirical evidence on currency choice

5.3 General equilibrium and counterfactuals

6 Conclusions and directions for future research

A Additional figures

3 Rethinking exchange rate regimes

2 A brief history of the dominant currency

3 Rethinking exchange rate regimes.

4 Dollar dominance in the 21st century

5 Exchange rate practices in extended Bretton Woods II

6 Striking stability at the center of the system

7 Capital flows and capital controls

8 The impossible trinity and the new Triffin dilemma

9 Conclusions

4 CIP deviations, the dollar, and frictions in international capital markets

2 CIP: background, definition and measurement

2.1 CIP deviation: a wedge between dollar interest rates in two funding markets

2.2 Definition of the cross-currency basis

3 CIP deviations for benchmark bank rates

3.1 Pre-GFC and post-GFC dichotomy

3.2 Correlation with nominal interest rates

3.3 Co-movement with global risk factors

4 CIP deviations and bank balance sheet constraints

4.1 Supply and demand drivers of CIP deviations

4.2 Non-risk-weighted capital requirements

4.3 Constraints on the composition of bank balance sheets

4.4 Co-movement with other near-arbitrage spreads

4.5 Constraints facing non-bank market participants

5 Demand for dollar funding and hedging services

5.1 The demand side of the FX swap market

5.1.1 Banks

5.1.2 Non-bank financial institutions

5.1.3 Corporate issuers

5.2 Dollar funding demand and interest rates

5.3 The role of central bank swap lines

6 CIP deviations for government bond yields

6.1 Definition and overview

6.2 Government bond CIP deviations between developed markets and the US

6.3 Government bond CIP deviations between emerging markets and the U.S.

7 Exchange rates and CIP deviations

8 Takeaways and open research questions

9 Conclusion

A Calculating the annualized forward premium

5 International macroeconomics with imperfect financial markets

1 A simple theoretical framework

1.1 Financiers

1.2 Equilibrium exchange rate.

2 The financial frictions view of international macroeconomics

2.1 Gross financial flows and exchange rates

2.2 Production and sticky prices: exchange rates as shock absorbers or sources of instability

2.3 Foreign exchange intervention

2.4 The carry trade and financial constraints

2.5 Infinite horizon, monetary policy, and multiple countries

2.6 Asymmetric models: the special role of the US and US dollar

3 Conclusions

6 The prudential use of capital controls and foreign currency reserves

2 Historical and empirical perspective

2.1 Institutional background

2.2 Empirical observations

3 Model

4 A capital flight shock and the optimal response

4.1 Equilibrium in the international loan market

4.2 A monetary policy dilemma

4.3 Can ex post capital controls help?

5 Prudential policies

5.1 Equilibrium borrowing

5.2 Optimal policy ex ante: capital controls

5.3 Optimal policy ex ante: foreign currency reserves

5.4 Prudential policies: numerical examples

5.5 Pecuniary externalities

5.6 Interactions between aggregate demand and pecuniary externalities

6 Extensions and connections

6.1 Prudential monetary policy

6.2 Outright restrictions on capital outflows

6.3 Coordination problems

6.4 Alternative motives for capital controls

7 Empirical findings on effectiveness

8 Conclusions

A Proofs

A.1 Proof of Proposition 1

A.2 Proof of Proposition 2

A.3 Proof of Proposition 3

A.4 Proof of Proposition 4

B Data appendix

B.1 List of countries in the data set

B.2 Data sources and variable definitions

B.3 Exchange rate classification

B.4 Additional figures

7 Financial crises: a survey

2 Measurement: defining a financial crisis

2.1 Combining data and narrative criteria.

2.2 Standard binary classification

2.3 Finer classifications using narrative and data-driven criteria

3 Financial crisis predictability and causality

3.1 Credit expansion and asset price growth

3.2 What causes the credit expansion?

3.3 Behavioral biases, incentives, and predictability

3.4 Triggers

4 Explaining the painful consequences of a crisis

4.1 The crisis itself, or the boom that precedes it?

4.2 Not all credit booms are equal

5 Open economy considerations

5.1 Borrowing from abroad?

5.2 Crises and the Global Financial Cycle

6 Open questions and future research

Index

Back Cover.

Notes:

Description based on print version record.

ISBN:

9780323957731

0323957730