The paper discusses whether US dollar based financial sanctions will undermine the dollar's dominant international role. Despite long-standing attempts to reduce the role of the dollar, these have had limited success so far. I discuss why this is the case and why alternatives to the dollar are...

This paper constructs a data set on stocks of bilateral external assets and liabilities for a group of 18 countries, including developed and emerging economies. The data set covers the years 1980 to 2005 and distinguishes between four asset classes: foreign direct investment, portfolio equity,...

Our friend and colleague Rüdiger Dornbusch passed away before he was able tocomplete his book based on the Munich Lectures in Economics that he gave inNovember 17, 1998, at the Center for Economic Studies of Ludwig-Maximilians-Universität.The lectures contain a fascinating overview of the...

A growing share of emerging markets (EMs) uses hybrid versions of inflation targeting that differ from the IT regimes of the OECD countries. Real exchange rate and international reserve changes affect the policy interest rates in commodity countries, aiming to stabilize their real exchange rate...

We analyze shifts in the structure of China's capital outflows over the past decade. The composition of gross outflows has shifted from accumulation of foreign exchange reserves by the central bank to nonofficial outflows. Unlocking the enormous pool of domestic savings could have a significant...

According to the life-cycle theory, countries with high and rising youth ratios or high and rising old-age ratios tend to have low savings relative to investment, which depresses their capital outflows. This paper puts life-cycle theory to the test and studies the impact of demographic change on...

The purpose of this paper is to examine the global currency wars of the day. Besides that, it explains the major currencies. The fear of currency wars and the ways of dealing with them is discussed. Impact of currency volatility on the Indian economy is also part of the discussion. With low...

The global financial crises have had severe impact on various financial markets and the world economies at large. At various points in time during economic recessions, the confidence of the global investors is always sapped while most investors panic for safety. The past ten years especially...

Productivity growth has flat-lined in most economies despite rapid advances in technology. Economists suggest competing explanations for this paradox. Some argue the current stagnation will persist given deep structural challenges, arguing that recent technological advances are no match for...