In recent years, concerns over global financial fragmentation have grown amid rising geopolitical tensions. This column integrates a network structure in a multi-country model with imperfect financial markets to study how currency risk premia are connected to financiers’ risk bearing capacity. Guided by the theory, it constructs a centrality-based characteristic that gives a direct role […]
Although Chinese banks have remained the top lenders to emerging markets and developing economies (EMDEs), their growth has slowed and their lending patterns have changed since the pandemic. This column shows that while cross-border lending by Chinese banks to their EMDE borrowers was highly correlated with bilateral trade flows between both countries prior to the […]
The conventional wisdom is that uncertainty leads to economic contractions, but recent evidence challenges this assumption. This column introduces two novel concepts of uncertainty – agreed and disagreed uncertainty. It shows that when uncertainty is accompanied by widespread consumer disagreement about economic conditions (disagreed uncertainty), the economy remains stable despite the elevated uncertainty. In contrast, […]
Taiwan’s foreign minister will visit the U.S. state of Texas to speak at a forum on artificial intelligence (AI) and promote business and trade ties, his office said on Tuesday, as Taipei seeks to bolster investment and see off the threat of tariffs. Goods from tech powerhouse Taiwan had been due to face U.S. import […]
Kimberly Hilliard, co-founder of a five-year-old travel agency in Maryland, says at this time of year she usually fields up to 10 inquiries a week from clients eager to book vacations, but for much of the past month her phones have gone quiet. The unusual lull in Hilliard’s business followed a plunge in U.S. share […]
In recent years, banks’ credit line exposure to non-bank financial institutions has grown significantly. This column analyses the implications by focusing on a specific type of such institutions – real estate investment trusts. These trusts are significant investors in commercial real estate and therefore exposed to rising interest rates and economic slowdowns. They have higher […]
During the Greek debt crisis, zombie firms and non-performing business loans peaked at 20% and 50%, respectively. This column examines the negative effects of ‘zombie’ firms on investment, employment, and productivity during the crisis. The findings suggest that zombie firms have a negative impact on the economy through multiple channels, but highlight heterogeneities across sectors. […]
