Universität Bonn

Department of Economics

MEF-Seminar

Title Description
Masao Fukui (Boston University) , 07.06.2023 We study the consequences of “regime-induced” exchange rate depreciations by comparing outcomes for peggers versus floaters to the US dollar in response to a dollar depreciation. Pegger currencies depreciate relative to floater currencies and these depreciations are strongly expansionary. The boom is not associated with an increase in net exports, or a fall in nominal interest rates in the pegger countries. This suggests that expenditure switching and domes- tic monetary policy are not the main drivers of the boom. We develop a financially driven exchange rate (FDX) model in which multiple shocks originating in the financial sector drive exchange rates and households and firms can borrow in foreign currencies. Following a depreciation, UIP deviations lower the costs of borrowing from abroad and stimulate the economy, as in the data. The model is consistent with (unconditional) exchange rate disconnect and the Mussa facts, even though exchange rates have large effects on the economy.
Anna Zaharieva (Bielefeld University), 14.06.2023 tba.......................................................................................................
21.06.2023 tba............................................................................................................
Zsofia Barany (Central European University) 28.06.2023 tba.................................................................................................
Leo Kaas (Frankfurt), 05.07.2023 tba.........................................................................................................
Karen Kopecky (Altana Fed), 12.07.2023 tba..................................................................................................
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