Should Developed Economies Manage International Capital Flows? An Empirical and Welfare Analysis
实证发现风险溢价冲击在发达经济体中显著驱动经济波动，模型表明货币联盟国家管理资本流动可提升福利，而浮动汇率国家则不然。
The literature on the effects of country risk premium shocks has largely focused on emerging market economies. We empirically show that in developed economies, risk premium shocks explain a non‐trivial share of aggregate fluctuations and are key drivers of real activity during crises. Our empirical results and results from a two‐country New Keynesian model indicate that an increase in the risk premium leads to a reduction in aggregate output under monetary union, but not so in countries with flexible exchange rates and independent monetary policy. Model simulations suggest that managing international capital flows enhances welfare in countries under monetary union.