Annual Conference

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International Macroeconomics, Money & Banking

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May 2021

Trade Wars, Currency Wars

Michael B. DEVEREUX, Aurelien EYQUEM, Stephane AURAY
For most of the post WWII period, until recently, trade protectionism followed a downward trend, and was formulated in multilateral or bilateral agreements between countries. Recently however, there hasbeen a sharp shift towards unilateral, discretionary trade policy focused on short term macroecono...
Keywords: Protectionism, currency wars, Trade Wars
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Annual Conference

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International Macroeconomics, Money & Banking

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May 2021

Hidden Non-Performing Loans in China

Tianyue RUAN, Ben CHAROENWONG, Meng MIAO
We study non-performing loan (NPL) resolution using proprietary data on NPL transactions in China. Rather than representing orderly NPL resolution, the transactions appear to reflect banks concealing non-performing assets from regulators as (i) transaction prices do not reflect underlying credit ris...
Keywords: Financial regulation, regulatory arbitrage, systemic risk, Financial Distress
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Annual Conference

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International Macroeconomics, Money & Banking, Senior Fellows/Fellows

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May 2021

Corporate Foreign Bond Issuance and Interfirm Loans in China

Yi HUANG, Ugo PANIZZA, Richard PORTES
This paper uses firm-level data to document and analyze international bond issuance by Chinese non-financial corporations and the use of the proceeds of issuance. We find that dollar issuance is positively correlated with the differential between domestic and foreign interest rates. This interest ra...
Keywords: China, bond issuance in emerging market countries, carry trade, shadow banking
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Annual Conference

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International Macroeconomics, Money & Banking

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May 2021

Parallel Digital Currencies and Sticky Prices

Harald UHLIG, Taojun XIE
The rise of digital currencies may result in domestic parallel currencies. Their exchange rate shocks will present a new challenge for monetary policy. We analyze these issues in a New Keynesian framework, where  rms can set prices in one of the available currencies. Price rigidity translates a on...
Keywords: private money, cryptocurrency, digital currency, currency choice, mon- etary policy
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Annual Conference

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International Macroeconomics, Money & Banking, Senior Fellows/Fellows

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May 2021

Local Currency Bond Returns, Foreign Investors and Portfolio Flows in Emerging Markets

Giorgio VALENTE, Jason WU, Inhwan SO
Foreign investors play a key role in EME sovereign bond markets, in part because their portfolio flows are sensitive to bond returns and are therefore pro-cyclical in nature. This note discusses the implications of the framework proposed by So et al. (2019) which incorporates the risk that arises fr...
Keywords: Bond excess returns, Portfolio flows, institutional investors, Conditional asset pricing
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