Category Archives: IFDP Paper

IFDP 2018-1230: Innovation and Trade Policy in a Globalized World

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Ufuk Akcgit, Sina T. Ates, and Giammario Impullitti | How do import tariffs and R&D subsidies help domestic firms compete globally? How do these policies affect aggregate growth and economic welfare? To answer these questions, we build a dynamic ge…

IFDP 2018-1229: A Tale of Two Sectors: Why is Misallocation Higher in Services than in Manufacturing?

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Daniel A. Dias, Carlos Robalo Marques, and Christine Richmond | Recent empirical studies document that the level of resource misallocation in the service sector is significantly higher than in the manufacturing sector. We quantify the importance of thi…

IFDP 2018-1228: Financial Institutions’ Business Models and the Global Transmission of Monetary Policy

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Isabel Argimon, Clemens Bonner, Ricardo Correa, Patty Duijm, Jon Frost, Jakob de Haan, Leo de Haan, and Viktors Stevunovs | Global financial institutions play an important role in channeling funds across countries and, therefore, transmitting monetary …

IFDP 2018-1227: Foreign Effects of Higher U.S. Interest Rates

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Matteo Iacoviello and Gaston Navarro | This paper analyzes the spillovers of higher U.S. interest rates on economic activity in a large panel of 50 advanced and emerging economies. We allow the response of GDP in each country to vary according to its e…

IFDP 2018-1226: Measuring Monetary Policy Spillovers between U.S. and German Bond Yields

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Stephanie E. Curcuru, Michiel De Pooter, and George Eckerd | In this paper we estimate the magnitude of spillovers between bond markets in the U.S. and Germany following monetary policy communications by the FOMC and the ECB. The identification of…

IFDP 2018-1225: Structural Change and Global Trade

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Logan T. Lewis, Ryan Monarch, Michael Sposi, and Jing Zhang | Services, which are less traded than goods, rose from 50 percent of world expenditure in 1970 to 80 percent in 2015. Such structural change restrained “openness”–the ratio of world trade to…

IFDP 2018-1224: Searching for Yield Abroad: Risk-Taking Through Foreign Investment in U.S. Bonds

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John Ammer, Stijn Claessens, Alexandra Tabova, and Caleb Wroblewski | The risk-taking effects of low interest rates, now prevailing in many advanced countries, “search-for-yield,” can be hard to analyze due to both a paucity of data and challenges in i…

IFDP 2018-1223: Stock Market Cross-Sectional Skewness and Business Cycle Fluctuations

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Thiago R. T. Ferreira | Using U.S. data from 1926 to 2015, I show that financial skewness–a measure comparing cross-sectional upside and downside risks of the distribution of stock market returns of financial firms–is a powerful predictor of business…

IFDP 2018-1222: Measuring Geopolitical Risk

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Dario Caldara and Matteo Iacoviello | We present a monthly indicator of geopolitical risk based on a tally of newspaper articles covering geopolitical tensions, and examine its evolution and effects since 1985. The geopolitical risk (GPR) index spikes …

IFDP 2018-1221: Does Smooth Ambiguity Matter for Asset Pricing?

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A. Ronald Gallant, Mohammad R. Jahan-Parvar, and Hening Liu | We use the Bayesian method introduced by Gallant and McCulloch (2009) to estimate consumption-based asset pricing models featuring smooth ambiguity preferences. We rely on semi-nonparametric…