This study investigates the fiscal multipliers of 21 OECD countries during the global financial crisis using panel VAR methodology. Our findings suggest that the 1-year fiscal multiplier was greater than 1 during the crisis, whereas it was smaller than 1 before the crisis because of different...

This working paper was written by Refet S. Gürkaynak (Bilkent University, CEPR, CESifo and CFS), Sang Seok Lee (Bilkent University and CEPR), Paul Luk (Hong Kong Institute for Monetary and Financial Research) and Ju Hyun Pyun (Korea University Business School).We study the joint behaviour of...

We synthetically assess the three major transmission channels of international business cycles: bilateral trade, foreign direct investment (FDI), and portfolio investment flows between economies with multiple fixed effects. Using the data of 72 economies during 2010–2019, we find that real and...

There has been controversy between (two-country) theory and the empirics about whether hedging against real exchange rate fluctuations in the goods market influences foreign equity holdings. This study reconciles the theory with the empirics by introducing a multi-country framework with...

This paper finds that limited exchange rate flexibility in the form of “fear of appreciation” significantly slows adjustment of current account imbalances, providing novel support for Friedman’s conjecture regarding exchange-rate flexibility. We present a new stylized fact: floaters have...

We examine the effect of foreign direct investment (FDI) on local firms’ productivity via human capital transfer from multinational enterprises (MNEs) to local firms. Using the firm-level data for 2010–2015 from the Republic of Korea, we identify human capital spillovers using local firms’...

We investigate the effect of trade integration on interstate military conflict. Our empirical analysis, based on a large panel data set of 243,225 country-pair observations from 1950 to 2000, confirms that an increase in bilateral trade interdependence significantly promotes peace. It also...