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173
result(s)
Tariffs and the Exchange Rate: Evidence from Twitter
Staff Working Paper 2021-36
Dmitry Matveev,
Francisco Ruge-Murcia
Do tariffs affect exchange rates? We look at President Trump’s tweets during talks on the North American Free Trade Agreement and find that anticipation of higher tariffs on imports from Canada and Mexico led to an appreciation of the US dollar relative to Canadian and Mexican currency.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Exchange rates,
Trade integration
JEL Code(s):
F,
F1,
F13,
F3,
F31
Monetary Policy Independence and the Strength of the Global Financial Cycle
Staff Working Paper 2020-25
Christian Friedrich,
Pierre Guérin,
Danilo Leiva-Leon
We propose a new strength measure of the global financial cycle by estimating a regime-switching factor model on cross-border equity flows for 61 countries. We then assess how the strength of the global financial cycle affects monetary policy independence, which is defined as the response of central banks' policy interest rates to exogenous changes in inflation.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Business fluctuations and cycles,
Exchange rate regimes,
Financial system regulation and policies,
International financial markets,
Monetary policy
JEL Code(s):
E,
E4,
E5,
F,
F3,
F32,
F4,
F42,
G,
G1,
G15,
G18
Trade Flows and Exchange Rates: Importers, Exporters and Products
Staff Working Paper 2019-41
Michael Devereux,
Wei Dong,
Ben Tomlin
Using highly disaggregated transaction-level trade data, we document the importance of new firm-level trade partner relationships and the addition of new products to existing relationships in driving aggregate trade flows.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Exchange rates,
Firm dynamics,
International topics
JEL Code(s):
F,
F1,
F4
Exchange Rates, Retailers, and Importing: Theory and Firm-Level Evidence
Staff Working Paper 2019-34
Alex Chernoff,
Patrick Alexander
We develop a model with firm heterogeneity in importing and cross-border shopping among consumers. Exchange-rate appreciations lower the cost of imported goods, but also lead to more cross-border shopping; hence, the net impact on aggregate retail prices and sales is ambiguous.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Exchange rates,
International topics,
Service sector
JEL Code(s):
F,
F1,
F10,
F14,
L,
L8,
L81
Entrepreneurial Incentives and the Role of Initial Coin Offerings
Staff Working Paper 2019-18
Rodney J. Garratt,
Maarten van Oordt
Initial coin offerings (ICOs) are a new mode of financing start-ups that saw an explosion in popularity in 2017 but declined in popularity in the second half of 2018 as regulatory pressure, instances of fraud and reports of poor performance began to undermine their reputation.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Asset pricing,
Exchange rates
JEL Code(s):
G,
G3,
G32
Estimating the Effect of Exchange Rate Changes on Total Exports
Staff Working Paper 2019-17
Thierry Mayer,
Walter Steingress
This paper shows that real effective exchange rate (REER) regressions, the standard approach for estimating the response of aggregate exports to exchange rate changes, imply biased estimates of the underlying elasticities. We provide a new aggregate regression specification that is consistent with bilateral trade flows micro-founded by the gravity equation.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Econometric and statistical methods,
Exchange rates,
International topics
JEL Code(s):
F,
F1,
F11,
F12,
F3,
F31,
F32
The Impact of Surprising Monetary Policy Announcements on Exchange Rate Volatility
Staff Analytical Note 2018-39
Adam Albogatchiev,
Jean-Sébastien Fontaine,
Jabir Sandhu,
Reginald Xie
We identify a few Bank of Canada press releases that had the largest immediate impact on the exchange rate market. We find that volatility increases after these releases, but the effect is short-lived and mostly dissipates after the first hour, on average. Beyond the first hour, the size of the effect is similar to what we observe for other economic releases, such as those for inflation or economic growth data.
Content Type(s):
Staff research,
Staff analytical notes
Topic(s):
Exchange rates,
Financial markets,
Monetary policy
JEL Code(s):
E,
E4,
E44,
F,
F3,
F31,
G,
G1,
G10,
G12,
G14,
G15
Markets Look Beyond the Headline
Staff Analytical Note 2018-37
Bruno Feunou,
James Kyeong,
Raisa Leiderman
Many reports and analyses interpret the release of new economic data based on the headline surprise—for instance, total inflation, real GDP growth and the unemployment rate. However, we find that headline news alone cannot adequately explain the responses of market prices to new information. Rather, market prices react more strongly, on average, to non-headline news such as the composition of GDP growth, quality of jobs created and revisions to past data. Thus, tracking the impact of non-headline information released on the news day is crucial in analyzing how markets interpret and react to new economic data.
Content Type(s):
Staff research,
Staff analytical notes
Topic(s):
Asset pricing,
Exchange rates,
Interest rates
JEL Code(s):
E,
E4,
E43,
G,
G1,
G12,
G14
Macroprudential FX Regulations: Shifting the Snowbanks of FX Vulnerability?
Staff Working Paper 2018-55
Toni Ahnert,
Kristin Forbes,
Christian Friedrich,
Dennis Reinhardt
Can macroprudential foreign exchange (FX) regulations on banks reduce the financial and macroeconomic vulnerabilities created by borrowing in foreign currency? To evaluate the effectiveness and unintended consequences of macroprudential FX regulations, we develop a parsimonious model of bank and market lending in domestic and foreign currency and derive four predictions.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Exchange rates,
Financial institutions,
Financial system regulation and policies,
International financial markets
JEL Code(s):
F,
F3,
F32,
F34,
G,
G1,
G15,
G2,
G21,
G28