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on International Finance |
| By: | Manger, Mark S.; Mihalyi, David; Panizza, Ugo; Rescia, Niccolò; Trebesch, Christoph; Wong, Ka LoK |
| Abstract: | This paper introduces the African Debt Database (ADD) - a new, comprehensive dataset that traces both domestic and external debt instruments at a granular level. The main innovation is a detailed mapping of Africa's domestic debt markets, drawing on rich, new data extracted from government auction reports and bond prospectuses. The database covers over 50, 000 individual government loans and securities issued by 54 African countries between 2000 and 2024, amounting to a total of USD 6.3 trillion in debt. For each instrument, it provides harmonized micro-level information on currency, maturity, interest rates, instrument type, and creditor. The data reveal the growing dominance of domestic debt in Africa - albeit with substantial cross-country variation. Four stylized facts stand out: (i) the rapid expansion of domestic debt markets, especially in middle-income countries; (ii) the wide dispersion in bor-rowing costs and real interest rates; (iii) large cross-country differences in maturity structures and associated rollover risks; and (iv) a rising debt-service burden, particularly due to international bonds. Generally, this project shows that debt transparency is both feasible and valuable, even in data-scarce environments. |
| Keywords: | Sovereign Borrowing, Public Debt, Development Finance, Domestic Markets, Africa |
| JEL: | F34 H63 O55 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkwp:331879 |
| By: | Nenova, Tsvetelina |
| Abstract: | This paper provides novel empirical evidence on portfolio rebalancing in international bond markets through the prism of investors’ demand for bonds. Using a granular dataset of global government and corporate bond holdings by mutual funds domiciled in the world’s two largest currency areas, I estimate heterogeneous and time varying demand elasticities for bonds. Safe assets such as US Treasuries or German Bunds face especially inelastic demand from investment funds compared to riskier bonds. But spillovers from these safe assets to global bond markets are strikingly different. Funds substitute US Treasuries with global bonds, including risky corporate and emerging market bonds, whereas German Bunds are primarily substitutable within a narrow set of euro area safe government bonds. Substitutability deteriorates in times of stress, impairing the transmission of monetary policy. JEL Classification: F30, G11, G15 |
| Keywords: | international finance, portfolio choice, safe assets |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20253159 |
| By: | Bruno Cavani; Matteo Maggiori; Jesse Schreger |
| Abstract: | We construct representative security-fund-level longitudinal data for the United States using regulatory filings of portfolio holdings from Form N-PORT. We validate our dataset by comparing coverage and composition to official statistics from the Federal Reserve’s Financial Accounts of the United States (formerly known as the Flow of Funds) and Treasury International Capital (TIC) System, and to micro-level commercial datasets. We showcase an application by replicating and updating Maggiori, Neiman and Schreger (2020) findings on home currency bias using N-PORT instead of commercial fund holdings data. Our results confirm that N-PORT data offer a comprehensive, reliable, and public source for research in macroeconomics and finance. We make all the security-level data on holdings available in a public repository of the GCAP Lab and provide code for updating the data. |
| JEL: | F3 G0 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34494 |
| By: | Clemens Sialm; David X. Xu |
| Abstract: | Mutual funds create liquidity for investors by issuing demandable equity shares while holding illiquid securities. We study the implications of this liquidity creation by examining frequent trading suspensions in China, which temporarily eliminate market liquidity in affected stocks. These suspensions cause significant mispricing of mutual funds due to inaccurate valuations of their illiquid holdings. We find that investors actively acquire information about suspended stocks held by mutual funds, driving flows into underpriced funds. This information is subsequently incorporated into stock prices when trading resumes. Our findings suggest that mutual fund liquidity creation stimulates information acquisition about illiquid, information-sensitive assets. |
| JEL: | G11 G12 G14 G15 G23 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34520 |
| By: | Horn, Sebastian; Reinhart, Carmen M.; Trebesch, Christoph |
| Abstract: | This paper provides a comprehensive overview of China's lending to developing countries - a central feature of today's international financial system. Building on our previous research and the work of others, we document the scale, destination, and terms of China's overseas lending boom, as well as the lending bust and defaults that have followed. We compare China's lending boom to past boom-bust cycles and discuss the implications of China's rise as an international creditor on recipient countries and sovereign debt markets. The evidence indicates that Chinese state banks are assertive and commercially sophisticated lenders. For recipient countries, however, the jury is still out: it remains to be seen whether the gains from China's lending - through growth and improved infrastructure - will outweigh the more immediate burdens of debt service or the multifaceted costs of default. |
| Keywords: | China, sovereign debt, default, bailouts, official lending |
| JEL: | E3 F34 F65 F68 N2 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkwp:331877 |
| By: | Alberto Cavallo; Paola Llamas; Franco M. Vazquez |
| Abstract: | We use high-frequency retail microdata to measure the short-run impact of the 2025 U.S. tariffs on consumer prices. By matching daily prices from major U.S. retailers to product-level tariff rates and countries of origin, we construct price indices that isolate the direct effects of tariff changes across goods and trading partners. Prices began rising immediately after the broader tariff measures announced in early March and continued to increase gradually over subsequent months, with imported goods rising roughly twice as much as domestic ones. Our estimated retail tariff pass-through is 20 percent, with a cumulative contribution of about 0.7 percentage points to the all-items Consumer Price Index by September 2025. Our results show that tariff costs were gradually but steadily transmitted to U.S. consumers, with additional spillovers to domestic goods. |
| JEL: | E31 F13 F14 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34496 |
| By: | Christopher D. Cotton |
| Abstract: | Markets systematically misprice interest rate changes around central bank announcements. I show that the strongest predictor of this mispricing is recent change in global interest rates. More specifically, a 1 percentage point increase in global short-term interest rates in the 15 days before a central bank meeting is associated with a 12-basis point surprise increase in short-term rates at that meeting. I demonstrate that this is the result of markets underreacting to signals coming from the global interest rate cycle. |
| Keywords: | monetary policy surprise; central bank; global interest rate cycle; predictability |
| JEL: | E43 E52 E58 |
| Date: | 2025–11–01 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedbwp:102186 |
| By: | Bau, Nicolas; Dietrich, Simone |
| Abstract: | We review the literature on the political economy of foreign aid, examining the geopolitical returns generated by Official Development Assistance (ODA). Our paper identifies conditions under which donors are able to influence political and economic outcomes in recipient countries, shape their behavior in global affairs, and adjust to domestic and international challenges. First, we introduce our paper and outline the structure of our review. Second, we examine how the international system influences foreign aid motivations. Third, we discuss the literature on aid-giving practices and their geopolitical effects. Fourth, we explore the relationship between aid and international organizations. Fifth, we identify key challenges to the traditional aid architecture. Sixth, building on an emerging body of research in international development finance, we propose future directions for the study of ODA in a contested global landscape. Finally, we conclude by summarizing the main insights from our review. |
| Keywords: | foreign aid, geopolitics, foreign policy, development, international organizations, development finance, aid effectiveness |
| JEL: | F35 O19 P45 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkwp:331878 |
| By: | Altavilla, Carlo; Gürkaynak, Refet S.; Laeven, Luc; Kind, Thilo |
| Abstract: | We empirically examine the role of both official monetary policy announcements and policymakers’ speeches in the transmission of monetary policy to financial markets and the real economy in the euro area. Using intraday data covering a broad cross-section of financial assets, we construct the Euro Area Extended Monetary Policy Event-Study Database (EA-EMPD). We refine the identification of monetary policy surprises by exploiting granular, quote-level data on individual participants’ bid and ask submissions. This novel dataset expands the set of identifiable policy events by an order of magnitude relative to databases based solely on scheduled rate-setting meetings. Our analysis yields three main findings. First, speeches by euro area policymakers exert statistically and economically significant effects on asset prices across maturities, with magnitudes comparable to those observed following official policy announcements. Second, the transmission of speech-induced short-rate changes to the real economy closely mirrors that of policy decisions and combining both types of surprises significantly enhances the precision of statistical inference. Finally, when speeches are included in the measurement of policy surprises, the share of real-economy variance attributable to monetary policy increases fivefold, although its absolute magnitude remains relatively modest. JEL Classification: E43, E44, E52, E58, G14 |
| Keywords: | BVAR, event study, monetary policy surprise, speeches |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20253157 |
| By: | Aakash Bhalothia; Gavin Engelstad; Gaurav Khanna; Harrison Mitchell |
| Abstract: | We estimate the economic value of cities worldwide, using detailed job histories for 513 million workers in 220, 000 cities across 191 countries. These estimates allow us to identify why some cities are more productive than others and to quantify the earnings gains from migration throughout the development process. Our data contain job spells—with start and end dates, establishment names, locations, job titles, and effective salaries—enabling an event-study movers design with individual and time fixed effects. Moving to higher-value cities leads to immediate increases in job seniority, shifts into better-paid industries and occupations, and large overall earnings gains. The global scope of the data lets us compare internal and international moves and assess how the productivity advantages of cities differ by country income level. Across borders, 93% of wage changes reflect city effects, while within countries this share ranges from 45–73%. High-income countries exhibit stronger ability-based sorting, reducing the proportion attributable to place. City effects rise with industrial diversity and population, consistent with agglomeration economies, and more productive cities allocate workers to higher-productivity firms. The wide dispersion of city effects within countries highlights substantial potential gains from migration, particularly in low-income, less-urbanized economies. Reallocating workers to match the US distribution yields sizable wage gains in developing countries. |
| JEL: | J38 J6 O15 R12 R23 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34503 |