Publications
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Negative r-g have occurred more often than not, in both advanced and emerging economies.
However, r-g are no higher prior to sovereign defaults than in normal times.
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Among real exchange rates deflated by various prices (CPI, GDP deflator, unit labor cost),
only unit-labor-cost-based one shows significant negative correlation with external balance,
and it can be rationalized by price and wage rigidity alongwith intermediate goods trade.
Working Papers
Financial Crises, Debt Maturity, and Capital Controls
PDF,
slides
Overborrowing in short-term debt is especially severe because the repayment of short-term liabilities is larger
than that of long-term liabilities in future constrained states, resulting in greater cost undervaluation of
short-term financial obligations. Therefore, tightening of capital controls should tilt toward short maturities during financial crises.
Euro Area Inflation after the Pandemic and Energy Shock: Import Prices, Profits and Wages
IMF WP,
IMF Blog,
cited in The Economist
(with NJ Hansen and F Toscani)
Using an unified framework with inflation, wage, profit, and import cost, we show that up to 2023Q1 higher consumer prices mostly reflect increases in profits and import costs, but labor costs are picking up. Also, this is not equivalent to rising profitability.
Cars and the Green Transition: Challenges and Opportunities for European Workers
IMF WP,
(with O Celasun, G Sher, P Topalova)
Using the heterogeneity across European countries in the speed of transition to EV production and variation in sectoral and regional exposure to the automotive sector, this paper offers early evidence of the labor market implications of the EV transition.
Targeted, Implementable, and Practical Energy Relief Measures for Households in Europe
IMF WP,
(with N Arregui, O Celasun, D Iakova, A Mineshima, V Mylonas, F Toscani, Y Wong, L Zeng), featured in IMF F&D
In response to the energy crisis, bonuses or rebates on energy bills (that are not linked to the current volume of consumption) or block tariffs are simple options which would improve on the current policy design in many countries. The paper is accompanied with a detailed policy dataset downloadable at the IMF WP page.
The Economic Impacts on Germany of a Potential Russian Gas Shutoff
IMF WP,
cited in Bloomberg,
FT
(with Ting Lan, Galen Sher)
A full shutoff of the remaing gas from Russia (on top of the curtailment in the Nord Stream 1 pipeline) could shave 3 percent of Germany's GDP by 2023 and raise 2 percentage points in inflation.
Supply Bottlenecks: Where, Why, How Much, and What Next?
IMF WP,
cited in AFP,
Bloomberg,
Reuters,
Handelsblatt,
FT,
IMF blog
(with Oya Celasun, Niels-Jakob Hansen, Aiko Mineshima, Mariano Spector)
Supply bottlenecks shaved 2 percent GDP in the euro area, and boosted half of the rise in manufacturing producer price inflation.
Globally, shutdowns can explain up to 40 percent of the supply shocks. Sectors that are more reliant on differentiated inputs—such as autos—are harder hit.
Corporate Liquidity and Solvency in Europe during COVID-19: The Role of Policies
IMF WP,
cited in Bloomberg,
Expresso
(with Christian Ebeke, Nemanja Jovanovic, Laura Valderrama)
Announced policy measures could significantly reduced liquidity shortfalls and helped mitigate job and output losses during the COVID-19 crisis.
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Product turnover helps firm to cope with shocks, therefore, it is associated with lower risk premium and lower excess equity return.
Quality of Public Governance and the Capital Structure of Nations and Firms
NBER WP
(with Shang-Jin Wei)
Better institutional quality tends to promote a higher share of foreign direct investment and equity investment in total foreign liabilities, and a higher share of long-term debt within the debt/loan category.