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Building on the evolving literature on the topic, this paper reviews the relationship between demographics and long-run capital flows in both theory and in the data. For this purpose, we develop a two region overlapping generations model where countries differ in their population growth and mortality risk. Besides exploring the implications of demographics for saving and the current account over the long-run, we also study how these might be affected by differences in the coverage and sustainability of old-age transfer schemes. The model predicts that population structure and life expectancy (which affects the need to save to meet old age consumption) affect current account levels, and that while countries with more generous unfunded transfer schemes tend to have lower saving and more capital inflows over the long-run, this effect may be dampened by natural limits (on taxation) of these schemes. The key predictions of the model are generally supported by a rich panel dataset.

Demography --- Statistical methods. --- Exports and Imports --- Health: General --- Economics of the Elderly --- Economics of the Handicapped --- Non-labor Market Discrimination --- Current Account Adjustment --- Short-term Capital Movements --- International Investment --- Long-term Capital Movements --- Demographic Economics: General --- Population & demography --- Health economics --- International economics --- Health --- Aging --- Current account --- Capital flows --- Population and demographics --- Balance of payments --- Population aging --- Capital movements --- Population --- China, People's Republic of

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We study the role that changes in credit and fiscal positions play in explaining current account fluctuations. Empirically, the current account declines when credit increases, and when the fiscal balance declines. We use a two-country model with financial frictions and fiscal policy to study these facts. We estimate the model using annual data for the U.S. and “a rest of the world” aggregate that includes main advanced economies. We find that about 30 percent of U.S. current account balance fluctuations are due to domestic credit shocks, while fiscal shocks explain about 14 percent. We evaluate simple macroprudential policy rules and show that they help reduce global imbalances. By taming the financial cycle, macroprudential rules that react to domestic credit conditions or to domestic house prices would have led to a smaller and less volatile U.S. current account deficit. We also show that a countercylical fiscal policy rule that stabilizes output growth reduces the level and volatility of the U.S. current account deficit.

Macroeconomics --- Economics: General --- International Economics --- Model Evaluation and Selection --- Quantitative Policy Modeling --- Open Economy Macroeconomics --- Economic & financial crises & disasters --- Economics of specific sectors --- Financial crises --- Economic sectors --- Currency crises --- Informal sector --- Economics

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After 2007, countries that cut their policy interest rates close to zero turned, among other policies, to forward guidance. We estimate a two-country model of the U.S. and Canada to quantify how unexpected changes in U.S. forward guidance affected Canada. Expansionary U.S. forward guidance shocks, like conventional policy shocks, are beggar-thy-neighbor and depress Canadian output, but by twice as much as conventional shocks. We find that the effect of U.S. forward guidance shocks on Canadian output, unlike conventional policy shocks, depends on the state of U.S. demand and can be five times smaller when U.S. demand is weak.

Monetary policy. --- Monetary management --- Economic policy --- Currency boards --- Money supply --- Banks and Banking --- Inflation --- Macroeconomics --- Money and Monetary Policy --- Business Fluctuations --- Cycles --- Monetary Policy --- Open Economy Macroeconomics --- Interest Rates: Determination, Term Structure, and Effects --- Externalities --- Price Level --- Deflation --- Macroeconomics: Consumption --- Saving --- Wealth --- Monetary economics --- Banking --- Monetary expansion --- Central bank policy rate --- Spillovers --- Consumption --- Monetary policy --- Financial services --- Financial sector policy and analysis --- Prices --- National accounts --- Interest rates --- International finance --- Economics --- United States

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We combine a structural model with cross-sectional micro data to identify the causes and consequences of rising concentration in the US economy. Using asset prices and industry data, we estimate realized and anticipated shocks that drive entry and concentration. We validate our approach by showing that the model-implied entry shocks correlate with independently constructed measures of entry regulations and M&As. We conclude that entry costs have risen in the U.S. over the past 20 years and have depressed capital and consumption by about seven percent.

Banks and Banking --- Corporate Finance --- Finance: General --- Investments: Stocks --- Macroeconomics --- Interest Rates: Determination, Term Structure, and Effects --- Macroeconomics: Consumption --- Saving --- Wealth --- Corporate Finance and Governance: General --- General Financial Markets: General (includes Measurement and Data) --- Pension Funds --- Non-bank Financial Institutions --- Financial Instruments --- Institutional Investors --- Finance --- Ownership & organization of enterprises --- Investment & securities --- Zero lower bound --- Consumption --- Corporate sector --- Competition --- Stocks --- Financial services --- National accounts --- Economic sectors --- Financial markets --- Financial institutions --- Interest rates --- Economics --- Business enterprises --- United States