Annual Conference

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International Macroeconomics, Money & Banking

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May 2022

Currency Volatility and Global Technological Innovation

Po-Hsuan HSU, Mark P. TAYLOR, Zigan WANG, Qi XU
We investigate the real effects of foreign exchange (FX) volatility on technological innovation. Using a 32-market, three-decade sample, we show that heightened FX volatility associates with significantly lower firm-level R&D expenditures, patents granted, and forward citations. The negative FX ...
Keywords: Foreign Exchange Volatility, Technological Innovation, Patents, R&D
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Annual Conference

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International Macroeconomics, Money & Banking

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May 2022

Dollar beta and stock returns

Ilhyock SHIM , Hyun Song SHIN, Valentina BRUNO
The financial channel of exchange rates operates through changes in risk-taking by investors and is reflected in the response of financial conditions to exchange rate movements. We show that stock returns also reflect the financial channel of exchange rates, with higher local currency stock returns ...
Keywords: global liquidity, pricing factor, emerging market, exchange rate
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Annual Conference

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International Macroeconomics, Money & Banking

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May 2022

Credit Allocation and Macroeconomic Fluctuations

Karsten MULLER, Emil VERNER
We study the relationship between credit expansions, macroeconomic fluctuations, and financial crises using a novel database on the sectoral distribution of private credit for 117 countries starting in 1940. Theory predicts that the sectoral allocation of credit matters for distinguishing between â€...
Keywords: credit booms, credit allocation, growth, banking crises
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Annual Conference

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International Macroeconomics, Money & Banking

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May 2022

Leaning Against the Wind: An Empirical Cost-Benefit Analysis

Luis BRANDAO-MARQUES, Gaston GELOS, Machiko NARITA, Erlend NIER
This paper takes a new approach to assess the benefits of using different policy tools—macroprudential and monetary policies, foreign exchange interventions, and capital controls—in response to changes in financial conditions. Starting from quantile regressions, we evaluate policies across the f...
Keywords: monetary policy, macroprudential policy, FX intervention, capital controls, cost-benefit analysis
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Annual Conference

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International Macroeconomics, Money & Banking

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May 2022

The Coming Battle of Digital Currencies

Lin William CONG, Simon MAYER
We model the dynamic competition among national fiat currencies, cryptocurrencies, and Central Bank Digital Currencies (CBDCs), whereby a country’s fiscal strength and currency strength are mutually reinforcing. The rise of cryptocurrencies hurts stronger fiat currencies, but can benefit weaker fi...
Keywords: CBDC, Cryptocurrency, Currency Competition, Digitization, Dollarization, Money, Stablecoin, Tokenomi
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