In our paper, we argue that pure panic narrative of a financial crisis depends crucially on the nonexistence of outside capital. If people know that the run is due to pure panic, outside investors have a huge incentive to invest and make tons of money. onlinelibrary.wiley.com/doi/…

Food for thought! "Dominant Currency Pricing and Currency Risk Premia" by Husnu C. Dalgic and Galip Kemal Ozhan. "This paper studies how dominant-currency pricing affects currency risk premia. Empirically, we extract common risk factors from excess currency returns using principal components and relate countries’ factor exposures to observable macroeconomic characteristics, with export dollar invoicing emerging as a predictor of carry-trade exposure. A small open-economy model with dominant-currency pricing and dollar-denominated liabilities explains why. Dollar export invoicing weakens the exchange rate’s stabilizing effect on external demand, while dollar debt makes depreciation costly for leveraged intermediaries. When the two frictions interact, depreciations occur in bad states, local-currency assets become risky, the currency premium rises, and the risk-adjusted neutral rate increases. Under a standard Taylor rule, this mechanism generates persistently higher inflation." dropbox.com/scl/fi/sc5571ywv…

Looking forward to @HCD342 presenting our paper, “Dominant Currency Pricing and Currency Risk Premia,” in the Dominant Currencies Session. Comments and feedback are warmly welcome!

Our new paper online 👇🏽

Cool paper from my coauthor 👇🏼

I find this sentence from the abstract highly problematic "infrastructure spending can raise support for autocracy" People like infrastructure and certainly it can also raise support for democracy. If anything, it should tempt politicians to invest more in housing and roads

I stopped reading The Economist when I realized how shallow their coverage of Turkey is—calling a cult leader a "scholar"? How can I trust their insights on Asia or the Middle East after that?

Our brief report (in German) on fertility dynamics in Germany during the Great Recession and the Pandemic Recession.

A new version of the paper by my favorite economist

Guess the country? (Email is translated)

Cycle is the trend?

Our paper (with @DauthEcon, @HermannGartner, Michael Stops, and Enzo Weber)on the effect of #WorkingfromHome potential on work-home distance! Despite no trend prior to the pandemic, people in occupations with high Work-from-Home potential increased their distance more after 2020

In a recent paper w/ @APFerrero @HughLi85363603 we employ a similar approach (panel VAR estimated DSGE) to ask: - Does a flexible FX regime provide enough insulation to US monetary policy socks? - Are additional instruments necessary for domestic monetary policy independence?

🚨𝗜𝗻𝘁𝗲𝗿𝗻𝗮𝘁𝗶𝗼𝗻𝗮𝗹 𝗺𝗮𝗰𝗿𝗼 𝗽𝗲𝗼𝗽𝗹𝗲🚨 Don't miss this great paper by @EconSanti @christiano3 @HCD342 and insightful discussions by @skalemliozcan and @JonSteinsson!

Our paper on "The International Monetary Transmission"👇👇

Sad European story

Not wearing a seatbelt is probably fine in most cases