Financial crises

 

• Globalization Institute Working Paper

  Living Up to Expectations: Central Bank Credibility, the Effectiveness of Forward Guidance and Inflation Dynamics Post-Global Financial Crisis

  This paper studies the effectiveness of forward guidance when central banks have imperfect credibility.

  September 29, 2023

• Emerging-market countries insulate themselves from Fed rate hikes

  Earlier episodes of sizable Fed tightening preceded destabilizing currency devaluations in emerging markets, precipitating sovereign debt and banking crises in many of those economies.

  August 08, 2023

• Research Department Working Papers

  Financial Shocks in an Uncertain Economy

  This paper focuses on some of the lessons we have learned over the years: (i) uncertainty and tail risk have cyclical variation; (ii) financial shocks can have a significant effect on macroeconomic outcomes; (iii) the impact of shocks is stronger in periods of high volatility.

  July 07, 2023

• Treasuries’ allure as safe haven noted in short maturities, not in long bonds

  The United States has a large negative net-foreign-asset position, especially in safe assets. In times of crisis, U.S. government debt, especially short-term Treasuries, are viewed as a safe haven. As a result, the U.S. is a net debtor. It is more leveraged and tends to hold more risky assets (mostly equities) and finance those positions by selling safe-asset debt to the rest of the world.

  June 27, 2023

• The connection between banking and sovereign debt crises

  Dallas Fed economist Sewon Hur examines how sovereign debt crises can amplify banking problems.

  May 30, 2023

• Research Department Working Papers

  Money Matters: Broad Divisia Money and the Recovery of Nominal GDP from the COVID-19 Recession

  The rise of inflation in 2021 and 2022 surprised many macroeconomists who ignored the earlier surge in money growth because past instability in the demand for simple-sum monetary aggregates had made these aggregates unreliable indicators. This paper finds that the demand for more theoretically-based Divisia aggregates can be modeled and that their growth rates provide useful information for future nominal GDP growth.

  May 25, 2023

• Capital flowed from emerging markets as pandemic, economic cycle took hold

  Fluctuations in the global financial cycle, reflecting impacts from the COVID crisis, account for roughly one-third of the movement in emerging-market inflows during 2020–23.

  March 07, 2023

• Dallas Fed, Latin American central banks explore financial stability risks

  The COVID-19 pandemic, recent monetary tightening and a strengthening U.S. dollar were the themes explored during a recent conference organized by the Federal Reserve Bank of Dallas and the Center for Latin American Monetary Studies (CEMLA) and held at CEMLA’s Mexico City headquarters.

  February 16, 2023

• Mission-oriented banks in Texas and underserved businesses: lessons from the Paycheck Protection Program

  Although it is too soon to have outcome data on the ECIP, we can still explore how useful expanding MDI and CDFI lending might be to underserved small firms by using data on loan access and forgiveness from its predecessor, the PPP.

  December 16, 2022