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, Tokenomics.
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Annual Conference

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International Macroeconomics, Money & Banking

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May 2022

Turbulent Business Cycles

Ding DONG, Zheng LIU, Pengfei WANG
Recessions are associated with sharp increases in turbulence that reshuffle firms’ productivity rankings. To study the business cycle implications of turbulence shocks, we use Compustat data to construct a measure of turbulence based on the (inverse of) Spearman correlations of firms’ productivi...
Keywords: Turbulence, heterogeneous firms, financial frictions, reallocation, productivity, business cycles.
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Annual Conference

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International Macroeconomics, Money & Banking

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May 2022

The Elusive Gains from Nationally Oriented Monetary Policy

Martin BODENSTEIN, Giancarlo CORSETTI, Luca GUERRIERI
According to one of the most striking results in the recent open macro literature, the gains from international monetary cooperation are negligible. We show that when assessed conditionally on empirically relevant dynamic developments of the economy, the welfare cost of moving away from regimes of e...
Keywords: monetary policy cooperation, global imbalances, open-loop Nash games
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Annual Conference

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Investment Finance, Senior Fellows/Fellows, Capital Market Development: China and Asia

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May 2022

Understanding Retail Investors: Evidence from China

Charles M. JONES, Donghui SHI, Xinran ZHANG, Xiaoyan ZHANG
Using comprehensive account-level data from 2016 to 2019, we examine retail investor trading behavior in the Chinese stock market. We separate millions of retail investors into five groups by their account sizes and document strong heterogeneity in their trading dynamics and performance. Retail inve...
Keywords: Retail investors, Chinese stock market, Return predictability, Information content
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