Better Capital Controls, and Less Interest Rate Hikes, Are What EMs Need

Life is tough if you are a central banker in an emerging market country. Besides dealing with your own country’s macroeconomic conditions, you have to worry about external shocks to a much larger extent than your colleagues in industrialized nations. Further, often due to a history of poor macroeconomic management and hyperinflation, foreign investors still […]

The Volcker Rule is a Necessary, but not a Sufficient Condition for Macrofinancial Stability

About five years after the global financial crisis of 2007-2008, the Volcker Rule – a key part of the Dodd-Frank Wall Street Reform and Consumer Protection Act – was approved by the five financial regulatory agencies last week, and is scheduled to go into effect on April 1st 2014. As widely known, the main feature […]

The Role of Financial Stress in the Sovereign Debt-Output Nexus, and in Economic Activity

Since the outbreak of the euro area crisis, the link between a country’s macroeconomic performance and the level of its sovereign debt has become a central topic in the economic debate. Now, the recent showdown in the U.S. Congress over raising the country’s debt ceiling has made this issue central once again, not only for […]