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New evidence on the effects of US monetary policy on exchange rates

Kalyvitis, Sarantis; Michaelides, Alexander - London School of Economics (LSE) - 2001

We examine the impact of US monetary policy shocks on exchange rates using the monetary policy indicator proposed by Bernanke and Mihov [Quarterly Journal of Economics, 113 (1998) 869–902]. We find evidence for instantaneous, rather than delayed, US dollar overshooting after a monetary shock...

Persistent link: https://www.econbiz.de/10010745023

On the detrimental impact of visa restrictions on bilateral trade and foreign direct investment

Neumayer, Eric - London School of Economics (LSE) - 2011

This article estimates the effect of visa restrictions on bilateral trade flows and foreign direct investment (FDI …, which is detrimental to trade and FDI. Employing a standard gravity-type model in a global dyadic country sample, I estimate … place by the partner country, this lowers bilateral trade and FDI by up to 19 and 25 per cent, respectively. If both …

Persistent link: https://www.econbiz.de/10010744803

Hundi/hawala: the problem of definition

Martin, Marina B.V. - London School of Economics (LSE) - 2009

of functions, but whose central purpose is trade. …

Persistent link: https://www.econbiz.de/10010745765

Trapped factors and China’s impact on global growth

Bloom, Nicholas; Romer, Paul; Terry, Stephen; Van … - London School of Economics (LSE) - 2014

In a general equilibrium product-cycle model, lower trade barriers in-crease Southern purchasing power, which lifts … from a baseline OECD growth rate of 2% we find that trade integration with low-wage countries in the decade around China …

Persistent link: https://www.econbiz.de/10011126023

Currency unions in prospect and retrospect

Silva, J.M.C. Santos; Tenreyro, Silvana - London School of Economics (LSE) - 2010

particular, and in contrast with estimates of the trade effect of other currency unions, we find that the impact of the euro on … trade has been close to zero. After reviewing the costs and benefits, we conclude with some open questions on normative and …

Persistent link: https://www.econbiz.de/10010746444

Moral hazard and debt maturity

Huberman, Gur; Repullo, Rafael - London School of Economics (LSE) - 2014

We present a model of the maturity of a bank’s uninsured debt. The bank borrows funds and chooses afterwards the riskiness of its assets. This moral hazard problem leads to an excessive level of risk. Short-term debt may have a disciplining effect on the bank’s risk-shifting incentives, but...

Persistent link: https://www.econbiz.de/10011163493

Risk models–at–risk

Boucher, Christophe M.; Danielsson, Jon; Kouontchou, … - London School of Economics (LSE) - 2013

The experience from the global financial crisis has raised serious concerns about the accuracy of standard risk measures as tools for the quantification of extreme downward risk. A key reason for this is that risk measures are subject to model risk due, e.g., to specification and estimation...

Persistent link: https://www.econbiz.de/10011163494

A proposal for an open-source financial risk model

Ho Hwang, Jong - London School of Economics (LSE) - 2013

This paper presents a policy proposal for building a new framework for gathering, measuring and disclosing financial risk information in the global economy. The paper examines the current state of the financial risk framework, notes its advantages and disadvantages and proposes a new construct...

Persistent link: https://www.econbiz.de/10011163501

Capital structure and investment dynamics with fire sales

Gale, Douglas; Gottardi, Piero - London School of Economics (LSE) - 2013

We study a general equilibrium model in which firms choose their capital structure optimally, trading off the tax advantages of debt against the risk of costly default. The costs of default are endogenous: bankrupt firms are forced to liquidate their assets, resulting in a fire sale if there is...

Persistent link: https://www.econbiz.de/10011163502

Diversification and financial stability

Tasca, Paolo; Battiston, Stefano - London School of Economics (LSE) - 2014

This paper contributes to a growing literature on the pitfalls of diversification by shedding light on a new mechanism under which, full risk diversification can be sub-optimal. In particular, banks must choose the optimal level of diversification in a market where returns display a bimodal...

Persistent link: https://www.econbiz.de/10011163503