International topics
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Productive Misallocation and International Transmission of Credit Shocks
We develop an asymmetric, two-country equilibrium business cycle model to study the role of international trade in transmitting and propagating the real effects of global financial shocks. Our model predicts that a recession in a large economy considerably alters a recession in its smaller trade partner, with distinct investment dynamics driving the transmission. -
June 8, 2015
Panel remarks for round table discussion at the 21st Conference of Montréal
Introduction Thank you for the invitation to be here today. I’m honoured to be part of this panel. It’s been more than seven years since the global financial crisis began, and we’re still coping with its aftermath. One of the consequences of the crisis has been a disruption of financial globalization. Global capital flows—to give […] -
Exploring Differences in Household Debt Across Euro Area Countries and the United States
We use internationally comparable household-level data for ten euro area economies and the United States to investigate cross-country differences in debt holdings and the potential of debt overhang. -
May 14, 2015
Inflation Dynamics in the Post-Crisis Period
Inflation rates in advanced economies experienced two consecutive puzzles during the period following the global financial crisis—unexpectedly high inflation from the end of 2009 to 2011 and unexpectedly low inflation from 2012 to the middle of 2014. We investigate these developments in two ways. First, we show that accounting for inflation expectations by households explains a significant share of the inflation puzzles at the international level. Second, we find that, for Canada, elevated competition in the retail sector is also important for understanding inflation dynamics in the post-crisis period. -
May 14, 2015
The Slowdown in Global Trade
Global trade growth has been weak during the period following the 2007–09 financial crisis. This is an important development for Canada, given the Canadian economy's high degree of openness to trade. This article investigates some of the factors behind the slowdown in global trade and finds that the weakness of global demand and its changing composition, increased protectionism and diminishing incentives to expand trade have all played a role. Some of these factors are likely to have only a temporary effect on trade growth, but others could be more long-lasting. -
Sluggish Exports in Advanced Economies: How Much Is Due to Demand?
Exports in advanced economies have been relatively sluggish since 2011, growing at a much slower pace than observed before the global financial crisis. -
What Drives Bank-Intermediated Trade Finance? Evidence from Cross-Country Analysis
Empirical work on the underlying causes of the recent dislocations in bank-intermediated trade finance has been limited by the poor availability of hard data. This paper analyzes the key determinants of bank-intermediated trade finance using a novel data set covering ten banking jurisdictions. -
Motivations for Capital Controls and Their Effectiveness
We assess the motivations for changing capital controls and their effectiveness in India, a country with extensive and long-standing controls. We focus on the controls on foreign borrowing that can, in principle, be motivated by macroprudential concerns. -
Does Financial Integration Increase Welfare? Evidence from International Household-Level Data
Despite a vast empirical literature that assesses the impact of financial integration on the economy, evidence of substantial welfare gains from consumption risk sharing remains elusive. While maintaining the usual cross-country perspective of the literature, this paper explicitly accounts for household heterogeneity and thus relaxes three restrictive assumptions that have featured prominently in the past.