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Bank:Board of Governors of the Federal Reserve System (U.S.) 

Working Paper
Reputation and Investor Activism: A Structural Approach

We measure the impact of reputation for proxy fighting on investor activism by estimating a dynamic model in which activists engage a sequence of target firms. Our estimation produces an evolving reputation measure for each activist and quantifies its impact on campaign frequency and outcomes. We find that high reputation activists initiate 3.5 times as many campaigns and extract 85% more settlements from targets, and that reputation-building incentives explain 20% of campaign initiations and 19% of proxy fights. Our estimates indicate these reputation effects combine to nearly double the ...
Finance and Economics Discussion Series , Paper 2017-036r1

Working Paper
Sticky inflation and interest rate rules with auction prices

Finance and Economics Discussion Series , Paper 117

Working Paper
Exchange rates, optimal debt composition, and hedging in small open economies

This paper develops a model of the firm's choice between debt denominated in local currency and that denominated in foreign currency in a small open economy characterized by exchange rate risk and hedging possibilities. The model shows that the currency composition of debt and the level of hedging are endogenously determined as optimal firms' responses to a tradeoff between the lower cost of borrowing in foreign debt and the higher risk of such borrowing due to exchange rate uncertainty. Both the composition of debt and the level of hedging depend on common factors such as foreign exchange ...
Finance and Economics Discussion Series , Paper 2008-18

Discussion Paper
Funding Agreement-Backed Securities in the Enhanced Financial Accounts

This note describes new data on funding agreement-backed securities (FABS) that is being provided as part of the Enhanced Financial Accounts (EFA) initiative.
FEDS Notes , Paper 2016-08-05-2

Working Paper
U.S. Unconventional Monetary Policy and Transmission to Emerging Market Economies

We investigate the effects of U.S. unconventional monetary policies on sovereign yields, foreign exchange rates, and stock prices in emerging market economies (EMEs), and we analyze how these effects depend on country-specifc characteristics. We find that, although EME asset prices, mainly those of sovereign bonds, responded strongly to unconventional monetary policy announcements, these responses were not outsized with respect to a model that takes into account each country's time-varying vulnerability to U.S. interest rates affected by monetary policy shocks.
International Finance Discussion Papers , Paper 1109

Working Paper
The short-run relation between growth and inflation in Latin America: a quasi rational or consistent expectations approach

International Finance Discussion Papers , Paper 118

Working Paper
Why do U.S. cross-listings matter?

This paper investigates the underlying determinants of home bias using a comprehensive sample of U.S. investor holdings of foreign stocks. We document that U.S. cross-listings are economically important, as U.S. ownership in a foreign firm roughly doubles upon cross-listing in the United States. We explore the cross-sectional variation in this "cross-listing effect" and show that increases in U.S. investment are largest in firms from weak accounting backgrounds and in firms that are otherwise informationally opaque, indicating that U.S. investors value the improvements in disclosure ...
International Finance Discussion Papers , Paper 930

Working Paper
Trade policies and fiscal devaluations

Fiscal devaluations—an increase in import tariffs and export subsidies (IX) or an increase in value-added taxes and payroll subsidies (VP)—have been shown to provide as much stimulus under fixed exchange rates as a currency devaluation. We find that if agents expect policies to be reversed and the tax pass-through is large, VP is contractionary and IX provides a modest boost. In our medium-scale DSGE model, both features are crucial in accounting for Germany’s underperformance in response to VP in 2007. These findings cast doubt on fiscal devaluations as a cyclical stabilization tool ...
International Finance Discussion Papers , Paper 1347

Discussion Paper
"Low-For-Long" Interest Rates and Portfolio Shifts in Advanced Foreign Economies

For the past several years, interest rates in many advanced economies have been at historic lows. Although low interest rates have helped support recovery in these economies, persistently low rates have also raised concerns about increased incentives for risk-taking by investors to achieve higher yields.
IFDP Notes , Paper 2016-12-30-1

Conference Paper
Remarks on evolving payment system issues

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