This paper shows that monetary policy can have asymmetric effects in a matching model along the lines of D. Mortensen and C. Pissarides [1994. Job creation and job destruction in the theory of unemployment. Review of Economic Studies 61, 397–415]. when a balance sheet channel is at work. When a lender matches an entrepreneur, the investment project is financed and carried out. There is incomple...

Recently, in order to explore the mechanism behind wealth or income distribution, several models have been proposed by applying principles of statistical mechanics. These models share some characteristics, such as consisting of a group of individual agents, a pile of money and a specific trading rule. Whatever the trading rule is, the most noteworthy fact is that money is always transferred fro...

There is no definition of globalization in a form universally accepted and perhaps not even final one. The reason is that globalization includes a multitude of complex processes, reaching different areas of society. It can be a phenomenon, an ideology, a strategy or all together. One thing is certain: globalization raises an endless polemic, progressing continuously and irreversibly generate ma...

I. Recent Currency Crises A salient fact of Mexico’s and Thailand’s recent currency crises is the active role played by the monetary authority in contributing to the loss of reserves. In both cases, domestic credit showed a sizable increase, driven in part by central bank loans to the financial sector. This stands in sharp contrast with the standard economist’s model in which the proximate caus...

Abstract Large swings in capital flows into and out of emerging markets can potentially lead to excessive volatility in asset prices and credit supply. In order to lessen the impact of capital flows on financial instability, a number of researchers and policy markers have recently proposed the use of capital controls. This paper considers the benefit of adding capital controls as a potential in...

The wave of private capital flows toward developing countries in the early 1990s resembles to a great extent the earlier episode of the late 1970s. Despite some important differences in inflow composition, both episodes were characterized by a high concentration of flows in a relatively small number of countries, mainly in Latin America and East Asia. Also, both episodes ended in a major financ...

The monetary unit assumption of financial accounting assumes a stable currency (i.e., constant purchasing power over time). Yet, even during periods of low inflation or deflation, nominal financial statements violate this assumption. I posit that, while the effects of inflation are not recognized in nominal statements, such effects may have economic consequences. I find that unrecognized inflat...

This paper quantifies the impact of changes in U.S. monetary policy on sovereign bond spreads in emerging market countries. Specifically, the paper explores empirically how country risk, as proxied by sovereign bond spreads, is influenced by U.S. monetary policy, country-specific fundamentals, and conditions in global capital markets. While country-specific fundamentals are important in explain...

We study the dynamics linking monetary policy with bank leverage and show that adjustments in leverage act as the linchpin in the monetary transmission mechanism that works through uctuations in risk-taking. Motivated by the evidence, we formulate a model of the “risk-taking channel” of monetary policy in the international context that rests on the feedback loop between increased leverage of gl...

The purpose of this study is to study the impact of macroeconomic factors on return of energy sector in Shanghai stock market (SEE), which are inflation rate, money supply (M2), exchange rate, industrial production, bond, exports, imports, foreign reserve and unemployment rate. The secondary data, collected from People’s Bank of China and the National Bureau of Statistics of China, were for the...