The flight to safety and international risk sharing
By: Kekre, Rohan and Lenel, Moritz
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Material type: 
BookPublisher: The American Economic Review Description: 114(6), Jun, 2024: p. 1650-1691.Subject(s): Flight to Safety, International Monetary System, Safe Dollar Bonds, Risk-Bearing Capacity, Dollar Appreciation, Global Output Decline, Negative Risk Premium, Leveraged Capital Portfolio, Safety Shocks, Macroeconomic Volatility, US External Adjustment, Policy Transmission, Dollar Swap Lines
In:
The American Economic ReviewSummary: We study a business cycle model of the international monetary system featuring a time varying demand for safe dollar bonds, greater risk-bearing capacity in the United States than the rest of the world, and nominal rigidities. A flight to safety generates a dollar appreciation and decline in global output. Dollar bonds thus command a negative risk premium, and the United States holds a levered portfolio of capital finances in dollars. We quantify the effects of safety shocks and heterogeneity in risk-bearing capacity for global macroeconomic volatility, US external adjustment, and policy transmission, as of dollar swap lines.- Reproduced
https://www.aeaweb.org/articles?id=10.1257/aer.20211319
| Item type | Current location | Call number | Vol info | Status | Date due | Barcode |
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Articles
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Indian Institute of Public Administration | 114(6), Jun, 2024: p. 1650-1691 | Available | AR132926 |
We study a business cycle model of the international monetary system featuring a time varying demand for safe dollar bonds, greater risk-bearing capacity in the United States than the rest of the world, and nominal rigidities. A flight to safety generates a dollar appreciation and decline in global output. Dollar bonds thus command a negative risk premium, and the United States holds a levered portfolio of capital finances in dollars. We quantify the effects of safety shocks and heterogeneity in risk-bearing capacity for global macroeconomic volatility, US external adjustment, and policy transmission, as of dollar swap lines.- Reproduced
https://www.aeaweb.org/articles?id=10.1257/aer.20211319
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