Monetary models with explicit microfoundations always exhibit equilibria where fiat money has no value and agents are strictly worse off. Such equilibria are usually viewed as natural, as an implication of the fact that valued fiat money is purely a belief-driven phenomenon. In this paper, we push the opposite view by showing that if there are enough gains from trade fiat money equilibria alway...

The level, tenor and instability of capital flows from global financial markets towards developing countries are a major source of concern for macroeconomic managers, while their causes remain largely unexplained by economic theory. Country ‘fundamentals’ (such as economic growth, monetary stability and institutional capacity) as sources of default risk have been the main focus of economic rese...

In addition to providing utility, and possibly capital gains, housing facilitates credit transactions when home equity serves as collateral. We document big increases in home-equity loans coinciding with the US house-price boom, and suggest a connection. When it is used as collateral, housing bears a liquidity premium. Since liquidity is endogenous, and depends to some extent on beleifs, even w...

The impact of changes in exchange rate on inflation is an issue of extreme importance for nations with a history of high inflation. While there have been significant studies on industrial and advanced economies, little analysis has been conducted on smaller economies that are open to trade and financial relationships. This paper estimates exchange rate pass-through (ERPT) into CPI and import pr...

Singapore registered one of the most impressive recoveries from pandemic, with economic output having surpassed pre-crisis levels at end-2021. This was spurred by country’s strong fundamentals, an vaccination rollout, and authorities’ decisive policy responses. However, recovery has been uneven activities in tourism-related, consumer-facing construction sectors remaining well below pre-pandemic...

Using panel data from 30 regions in China during the period 1999:01–2020:12, this paper evaluates effects of national fundamentals affecting movement regional house prices by estimating a factor-augmented VAR model. We construct and examine hypothesis that prices, such as monetary policy (short-term interest rate M2), real output, inflation rate, may affect through their impacts on common facto...

We examine empirically the effect of two types shocks related to expectations – “news” (increases in expected future productivity) and “sentiment” (surges optimism unrelated on gross capital flows. These together explain more than 80% variation flows at all horizons, with largest part being due sentiment shocks. Both these drive a positive correlation between inflows outflows but only sentiment...

This study explores the economic factors of foreign direct investment (FDI) from China to Europe. By drawing data over 8 years and dataset International Monetary Fund (IMF) World Bank (WB), we found that Chinese FDI outflows Europe are driven by recipient country's fundamentals (trade openness, resource, institutional quality, growth). These findings confirm current literature while asserting c...

In this paper, we investigate some economic fundamentals related to the Tezos blockchain platform under Emmy* consensus protocol. The protocol is based on a liquid version of Proof-of-Stake, in sense that users can temporarily delegate or all their Tz units full nodes. addition increasing stake node, and thus probability being selected as block baker/endorser, such delegation induces property s...

Despite the volumes written on the failure of empirical exchange rate models, there is a key feature of the record that is much overlooked, namely there are some subperiods of floating rates during which macroeconomic models provide reasonable explanations of monthly or quarterly exchange rate movements and other subperiods during which the explanatory power of these models completely disappear...