Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

The COVID-19 pandemic and associated policy responses triggered a historically large wave of capital reallocation between markets and asset classes. Using high-frequency country-level data, this paper examines if and how the number of COVID cases, the stringency of the lockdown, and the fiscal and monetary policy response determined the dynamics of portfolio flows. Despite more dominant global factors, we find that these domestic factors played an important role, particularly for emerging markets and bond flows, contributing to a global wave of reallocation to safer asset classes. Our results indicate that rising domestic COVID cases had a strong positive effect on portfolio flows, which responded to an increase in financing needs in affected economies. Lockdown and fiscal policy measures also led to an increase in portfolio flows; however, evidence from the CDS market suggests that the increase in flows was dominated by supply forces, reflecting investors' preference for stronger policy responses. In contrast, we find that interest rate cuts led to a decline in portfolio flows as investors searched for higher yield. Finally, we show that COVID policy responses also affected countries' exposure to the global shock and that pre-COVID macroeconomic conditions, such as lower sovereign risk and higher trade openness, contributed to larger flows during the COVID episode.

China, People's Republic of --- Banks and Banking --- Investments: Bonds --- Macroeconomics --- Money and Monetary Policy --- Diseases: Contagious --- International Finance: General --- International Investment --- Long-term Capital Movements --- Portfolio Choice --- Investment Decisions --- Health Behavior --- Interest Rates: Determination, Term Structure, and Effects --- Fiscal Policy --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- General Financial Markets: General (includes Measurement and Data) --- Infectious & contagious diseases --- Banking --- Monetary economics --- Investment & securities --- COVID-19 --- Central bank policy rate --- Fiscal stimulus --- Credit default swap --- Bonds --- Communicable diseases --- Interest rates --- Fiscal policy --- Credit --- Covid-19

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

Understanding the impact of climate mitigation policies is key to designing effective carbon pricing tools. We use institutional features of the EU Emissions Trading System (ETS) and high-frequency data on more than 2,000 publicly listed European firms over 2011-21 to study the impact of carbon policies on stock returns. After extracting the surprise component of regulatory actions, we show that events resulting in higher carbon prices lead to negative abnormal returns which increase with a firm's carbon intensity. This negative relationship is even stronger for firms in sectors which do not participate in the EU ETS suggesting that investors price in transition risk stemming from the shift towards a low-carbon economy. We conclude that policies which increase carbon prices are effective in raising the cost of capital for emission-intensive firms.

Macroeconomics --- Economics: General --- Environmental Economics --- Environmental Conservation and Protection --- Investments: Stocks --- Environmental Policy --- Information and Market Efficiency --- Event Studies --- General Financial Markets: Government Policy and Regulation --- Financing Policy --- Financial Risk and Risk Management --- Capital and Ownership Structure --- Value of Firms --- Goodwill --- Corporate Finance and Governance: Government Policy and Regulation --- Climate --- Natural Disasters and Their Management --- Global Warming --- Pension Funds --- Non-bank Financial Institutions --- Financial Instruments --- Institutional Investors --- Price Level --- Inflation --- Deflation --- Environmental Economics: Government Policy --- Economic & financial crises & disasters --- Economics of specific sectors --- Environmental economics --- Climate change --- Investment & securities --- Environmental policy & protocols --- Greenhouse gas emissions --- Environment --- Stocks --- Financial institutions --- Asset prices --- Prices --- Currency crises --- Informal sector --- Economics --- Emissions trading --- Greenhouse gases --- Climatic changes --- Germany

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

The rapid growth of crypto assets raises important questions about their cross-border usage. To gain a better understanding of cross-border Bitcoin flows, we use raw data covering both on-chain (on the Bitcoin blockchain) and off-chain (outside the Bitcoin blockchain) transactions globally. We provide a detailed description of available methodologies and datasets, and discuss the crucial assumptions behind the quantification of cross-border flows. We then present novel stylized facts about Bitcoin cross-border flows and study their global and domestic drivers. Bitcoin cross-border flows respond differently than capital flows to traditional drivers of capital flows, and differences appear between on-chain and off-chain Bitcoin cross-border flows. Off-chain cross-border flows seem correlated with incentives to avoid capital flow restrictions.

Balance of payments --- Blockchain and DLT --- Blockchains --- Business Taxes and Subsidies --- Capital flows --- Capital movements --- Central Banks and Their Policies --- Credit --- Currencies --- Currency crises --- Current Account Adjustment --- Databases --- Distributed ledgers --- Economic & financial crises & disasters --- Economics of specific sectors --- Economics --- Economics: General --- Exports and Imports --- Financial activity tax --- Financial services industry --- Government and the Monetary System --- Industries: Financial Services --- Informal sector --- International economics --- International Investment --- Long-term Capital Movements --- Macroeconomics --- Monetary economics --- Monetary Systems --- Money and Monetary Policy --- Money Multipliers --- Money Supply --- Money --- Payment Systems --- Public finance & taxation --- Regimes --- Short-term Capital Movements --- Standards --- Taxation --- Taxes --- Technological innovations --- Technology

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

The COVID-19 pandemic and the subsequent need for policy support have called the traditional separation between fiscal and monetary policies into question. Based on simulations of an open economy DSGE model calibrated to emerging and advance economies and case study evidence, the analysis shows when constraints are binding a more integrated approach of looking at policies can lead to a better policy mix and ultimately better macroeconomic outcomes under certain circumstances. Nonetheless, such an approach entails risks, necessitating a clear assessment of each country’s circumstances as well as safeguards to protect the credibility of the existing institutional framework.

Belgium --- Macroeconomics --- Economics: General --- Public Finance --- Inflation --- Money and Monetary Policy --- Banks and Banking --- Foreign Exchange --- Informal Economy --- Underground Econom --- Fiscal Policy --- Debt --- Debt Management --- Sovereign Debt --- Price Level --- Deflation --- Monetary Policy --- Interest Rates: Determination, Term Structure, and Effects --- Economic & financial crises & disasters --- Economics of specific sectors --- Public finance & taxation --- Monetary economics --- Banking --- Fiscal policy --- Public debt --- Prices --- Inflation targeting --- Monetary policy --- Fiscal stimulus --- Currency crises --- Informal sector --- Economics --- Debts, Public --- Interest rates