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on International Finance |
| By: | Guillaume Plantin; Hyun Song Shin |
| Abstract: | When does the combination of flexible exchange rates and domestic inflation-oriented monetary policy guarantee insulation from global financial conditions? We examine a dynamic global game model of international portfolio flows where, for some combination of parameters, the unique equilibrium exhibits the observed empirical feature that currency appreciation goes hand-in-hand with lower domestic interest rates and higher credit growth. When reversed, tighter monetary conditions go hand-in-hand with capital outflows and currency depreciation. |
| Keywords: | currency appreciation, capital flows, global games |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:bis:biswps:537&r=ifn |
| By: | Nguyen, Ha; Duncan, Alan |
| Abstract: | In this paper we provide the first solid empirical evidence that improvements in home countries’ macroeconomic conditions, as measured by a higher GDP per capita or lower price levels, increase immigrants’ subjective well-being. We demonstrate this by using 12 years of data from the Household Income and Labour Dynamics in Australia panel, as well as macroeconomic indicators for 59 countries of origin, and exploiting exogenous changes in macroeconomic conditions across home countries over time. Controlling for immigrants’ observable and unobservable characteristics we also find the positive GDP impact is statistically significant and economically large in size. Furthermore, the GDP and price impact erodes when immigrants get older, or when they stay in the host country beyond a certain period of time. However, home countries’ unemployment rates and exchange rate fluctuations have no impact on immigrants’ well-being. |
| Keywords: | GDP, unemployment, inflation, exchange rate, well-being, immigrants, Australia |
| JEL: | F22 I31 J15 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:69593&r=ifn |