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Conference on Financial Frictions and Monetary Policy in an Open Economy

March 16–17, 2012 Federal Reserve Bank of Dallas

On March 16–17, 2012, the Globalization and Monetary Policy Institute hosted a conference specifically devoted to the study of how financial frictions affect the design and conduct of monetary policy in an open economy.

The recent financial crisis has precipitated an outpouring of new research on the effects of financial frictions. However, most of the new work has been limited to a closed economy framework. Of the few that have studied financial frictions in an open economy setting, even fewer have specifically focused on the impact of those frictions on the optimal conduct of monetary policy.

Organizing committee:

  • Mark Wynne (Federal Reserve Bank of Dallas)
  • Michael Devereux (University of British Columbia)
  • Scott Davis (Federal Reserve Bank of Dallas)

Agenda

Friday, March 16, 2012
Session I: The Monetary Transmission Mechanism
Chair: Alexander Chudik, Federal Reserve Bank of Dallas
9 a.m. Nominal Stability and Financial Globalization
Presentation
Michael Devereux*, University of British Columbia
Ozge Senay, University of St. Andrews
Alan Sutherland, University of St. Andrews
  Discussion: Nominal Stability and Financial Globalization
Hafedh Bouakez, HEC Montréal
10 a.m. Global Implications of National Unconventional Policies
Luca Dedola*, European Central Bank
Peter Karadi, European Central Bank
Giovanni Lombardo, European Central Bank
  Discussant: Christoffer Koch, Federal Reserve Bank of Dallas
11:30 a.m. Financial Globalization and Monetary Transmission
Presentation
Simone Meier, Swiss National Bank
  Discussion of "Financial Globalization and Monetary Transmission" by Simone Meier
Pedro Gete, Georgetown University
Session II: Optimal Monetary Policy
Chair: Michael Plante, Federal Reserve Bank of Dallas
2 p.m. Optimal Monetary Policy Under Financial Sector Risk
Presentation
Scott Davis*, Federal Reserve Bank of Dallas
Kevin X.D. Huang, Vanderbilt University
  Discussion of "Optimal Monetary Policy Under Financial Sector Risk" by S. Davis and K. Huang
Césaire Meh, Bank of Canada
3 p.m. Financial Frictions and Optimal Monetary Policy in an Open Economy
Presentation
Giovanni Lombardo*
Marcin Kolasa, National Bank of Poland and Warsaw School of Economics
  Discussion: Financial Frictions and Optimal Monetary Policy in an Open Economy
Kevin X.D. Huang
4:30 p.m. Efficient Bailouts?
Presentation
Javier Bianchi, University of Wisconsin–Madison and New York University
  Discussion of "Effcient Bailouts?" by Javier Bianchi
Maya Eden, World Bank

Saturday, March 17

Session III: Banking and International Business Cycle Transmission
Chair: Carlos Zarazaga, Federal Reserve Bank of Dallas
9 a.m. Leverage Across Firms, Banks and Countries
Presentation
Bent Sorensen*, University of Houston and CEPR
Sebnem Kalemli-Ozcan, Koc University, Harvard University, NBER and CEPR
Sevcan Yesiltas, Johns Hopkins University
10 a.m. Liquidity Management of U.S. Global Banks: Internal Capital Markets in the Great Recession
Presentation
Linda Goldberg*, Federal Reserve Bank of New York and NBER
Nicola Cetorelli, Federal Reserve Bank of New York
  Discussion: Liquidity Management of U.S. Global Banks: Internal Capital Markets in the Great Recession
Wesley Phoa, The Capital Group
11:30 a.m. International Recessions
Presentation
Vincenzo Quadrini*, University of Southern California
Fabrizio Perri, University of Minnesota and Federal Reserve Bank of Minneapolis
  Discussion: International Recessions
Enrique Martínez-García, Federal Reserve Bank of Dallas
* Denotes presenter