How Vulnerable are EME Corporates?
This note provides an update on the health of EME corporates and examines the extent to which they are vulnerable to risks, including those that might be associated with monetary policy normalization in advanced economies.
Foreign Competition and Domestic Jobs : Evidence from the U.S. Trade Adjustment Assistance
Using data on the certified petitions for U.S. Trade Adjustment Assistance, I document that international trade unevenly affects reallocation and employment across U.S. states. Job gains are precisely lower in the places that shed more jobs due to trade. One extra trade-displaced worker is associated with the net employment falling by two extra workers relative to other locations. These unequal outcomes are in part due to the lack of worker mobility across locations.
BAT Signals from Asset Markets : Estimating the U.S. Dollar Response to a Destination-Based Cash-Flow Tax
In early 2017, there was substantial discussion about changing the U.S. corporate tax system to a destination-based cash-flow tax (DBCFT). The DBCFT proposal, also often referred to as a border-adjusted tax (BAT), would exclude exports from taxable revenues and exclude imports from allowable deductions.
The Energy Boom and Manufacturing in the United States: A First Look
Over the past eight years, the production of both crude oil and natural gas has increased sharply in the United States.
China's Footprints on the Global Economy : Remarks Delivered at the Second IMF and Federal Reserve Bank of Atlanta Research Workshop on the Chinese Economy
This note explores some key aspects of China’s economic rise and the spillovers to the rest of the world that this rise has created. It then examines, using the Federal Reserve Board’s large-scale global model (SIGMA), the potential consequences for the global economy were China’s economy to slow sharply. Although the probability of such an event is low, a sharp slowdown of Chinese economic growth could have significant consequences for the global economy.
Emerging Market Nonfinancial Corporate Debt : How Concerned Should We Be?
Nonfinancial corporate (NFC) debt in emerging market economies (EMEs) has tripled since the global financial crisis (GFC), reaching roughly $25 trillion, or 112 percent of GDP, in mid-2016. In this note, we assess corporate vulnerabilities by looking at two common metrics related to debt-servicing capacity: leverage (the ratio of debt to equity), and the interest coverage ratio (the ratio of earnings to interest expense).
Constructing a Dictionary for Financial Stability
In this note, we explain in detail how we made word-level choices in our dictionary. In the note, we also consolidate our lessons from this process into a framework for thinking about dictionary construction.
Recoveries and Trade : Does the Exchange Rate Regime Matter?
This note examines the connection between a country's exchange rate regime and the strength of its recovery from recessions.
Differences in Stock Returns of U.S. Firms with High and Low Tradability
In this note, I summarize the methodology and findings of my research paper and draw out the policy implications. The effects of GDP growth appear to matter more but the link between exchange rates and stock returns is also economically and statistically significant. The policy implications are that the spread in returns between U.S. firms with high and low tradability could provide a hedge against recessions. At the same time, stock returns are also informative about future exchange rate movements.
Debt Statistics a la Carte : Alternative Recipes for Measuring Government Indebtedness
In this note, we apply our same measurement techniques to the debts of Greece, Ireland and Portugal and show that plausible alternative measures of indebtedness suggest that Greece is anywhere from as much as 50% more indebted, to as little as half as indebted as either Portugal or Ireland. We argue that most reasonable measures imply that Greece is far less indebted than is commonly reported, and that indebtedness levels across these three economies are roughly similar.