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This paper assesses the effectiveness of lending restriction measures, such as loan-to-value and debt-service-to-income ratios, in affecting developments in house prices and credit. We use data on 99 lending standard restrictions implemented in 28 EU countries over 1990–2018. The results suggest that lending restriction measures are generally effective in curbing house prices and credit. However, the impact is delayed and reaches its peak only after three years. In addition, the impact is asymmetric, with tightening measures having weaker association with target variables compared to loosening measures. The association is stronger in countries outside of euro area and for legally-binding measures and measures involving sanctions. The results have practical implications for macroprudential authorities.

Banks and Banking --- Macroeconomics --- Money and Monetary Policy --- Real Estate --- General Financial Markets: Government Policy and Regulation --- Financial Institutions and Services: Government Policy and Regulation --- Studies of Particular Policy Episodes --- Housing Supply and Markets --- Interest Rates: Determination, Term Structure, and Effects --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Financial Markets and the Macroeconomy --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Banking --- Property & real estate --- Monetary economics --- Housing prices --- Central bank policy rate --- Credit --- Macroprudential policy instruments --- Foreign banks --- Prices --- Financial services --- Money --- Financial sector policy and analysis --- Financial institutions --- Housing --- Interest rates --- Economic policy --- Banks and banking, Foreign --- Hong Kong Special Administrative Region, People's Republic of China

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This paper analyzes macroeconomic determinants of the foreign exchange risk premium in two Gulf Cooperation Council (GCC) countries that peg their currencies to the U.S. dollar: Saudi Arabia and the United Arab Emirates. The analysis is based on the stochastic discount factor methodology, which imposes a no arbitrage condition on the relationship between the foreign exchange risk premium and its macroeconomic determinants. Estimation results suggest that U.S. inflation and consumption growth are important factors driving the risk premium, which is in line with the standard C-CAPM model. In addition, growth in international oil prices influences the risk premium, reflecting the important role played by the hydrocarbon sector in GCC economies. The methodology employed in this paper can be used for forecasting the risk premium on a monthly basis, which has important practical implications for policymakers interested in the timely monitoring of risks in the GCC.

Banks and Banking --- Investments: General --- Macroeconomics --- Money and Monetary Policy --- Time-Series Models --- Dynamic Quantile Regressions --- Dynamic Treatment Effect Models --- Diffusion Processes --- Foreign Exchange --- International Financial Markets --- Investment --- Capital --- Intangible Capital --- Capacity --- Financing Policy --- Financial Risk and Risk Management --- Capital and Ownership Structure --- Value of Firms --- Goodwill --- Energy: Demand and Supply --- Prices --- Macroeconomics: Consumption --- Saving --- Wealth --- Monetary Systems --- Standards --- Regimes --- Government and the Monetary System --- Payment Systems --- Financial services law & regulation --- Monetary economics --- Return on investment --- Exchange rate risk --- Oil prices --- Consumption --- Currencies --- National accounts --- Financial regulation and supervision --- Money --- Saving and investment --- Financial risk management --- Economics --- United States --- Foreign exchange --- Foreign exchange administration

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We employ a duration model to study determinants of public debt cycles in 57 advanced and emerging economies over the 1960–2014 period, with a particular focus on the impact of financial cycles. The results suggest that the association between financial and debt cycles is asymmetric. Debt expansions preceded by overheating in credit and financial markets tend to last longer than other expansions, but there is no significant association between financial cycles and debt contractions. There is strong evidence of duration dependence in both phases of the cycle, with the likelihood of expansions and contractions to end increasing with the length of their respective spells. Higher initial level of debt increases the spell of contractions (persistence of adjustment effort hypothesis) and reduces the spell of expansions (debt sustainability hypothesis). This result is robust to the inclusion of global factors, openness, political stability, and debt crisis indicators as additional controls.

Inflation --- Macroeconomics --- Public Finance --- Real Estate --- Debt --- Debt Management --- Sovereign Debt --- Business Fluctuations --- Cycles --- Housing Supply and Markets --- Fiscal Policy --- Price Level --- Deflation --- Public finance & taxation --- Property & real estate --- Public debt --- Financial cycles --- Housing prices --- Fiscal stance --- Financial sector policy and analysis --- Prices --- Fiscal policy --- Debts, Public --- Business cycles --- Housing --- Hong Kong Special Administrative Region, People's Republic of China

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This paper revisits the issue of cross-country spillovers from fiscal consolidations using an innovative empirical methodology. We find evidence in support of fiscal spillovers in 10 euro area countries. Fiscal consolidation in one country not only reduces domestic output (direct effect), but also the output of other member countries (indirect/spillover effect). Fiscal spillovers are larger for: (i) more closely located and economically integrated countries, and (ii) fiscal shocks originating from relatively larger countries. On average, 1 percent of GDP fiscal consolidation in 10 euro area countries reduces the combined output by 0.6 percent on impact, out of which half is driven by indirect effects from fiscal spillovers. The impact peters out and becomes insignificant over the medium-term. It is largely driven by tax measures, which have a relatively stronger effect on output compared to expenditure measures. The results are robust to alternative measures of bilateral links across countries.

Exports and Imports --- Macroeconomics --- Public Finance --- Fiscal Policy --- Externalities --- National Government Expenditures and Related Policies: General --- Financial Aspects of Economic Integration --- Public finance & taxation --- International economics --- Spillovers --- Fiscal consolidation --- Expenditure --- Fiscal multipliers --- Monetary unions --- Fiscal policy --- Financial sector policy and analysis --- Economic integration --- Fiscal stance --- International finance --- Expenditures, Public --- Germany

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Remitances are an important source of external financing in low- and middle-income countries. This paper uses the gravity model to analyze remittance flows in Russia and Caucasus and Central Asia (CCA) countries. Standard gravity determinants, such as GDP in sending and recieiving countries, bilateral distance, existence of common borders and common official language, fit remittance flows well. Remittances also react to inflation and exchange rate movements in recipient countries to sustain their purchasing power. In line with the altruism hypothesis, remittances flow to countries with higher age dependency ratio. Remittances are countercyclical and help stabilize outputs in recipient countries. However, global shocks resulting in sharp output losses of sending countries would lead to large volatility and decline of remittance inflows in recipient countries. The results of the analysis can be used to assess the impact of the COVID-19 shock on projected remittance flows into CCA.

Econometrics --- Exports and Imports --- Foreign Exchange --- Macroeconomics --- Emigration and Immigration --- Remittances --- Economic Development: Human Resources --- Human Development --- Income Distribution --- Migration --- Geographic Labor Mobility --- Immigrant Workers --- Econometric Modeling: General --- Energy: Demand and Supply --- Prices --- International Migration --- International economics --- Econometrics & economic statistics --- Currency --- Foreign exchange --- Migration, immigration & emigration --- Gravity models --- Oil prices --- Exchange rates --- Outward remittances --- Balance of payments --- Econometric analysis --- Population and demographics --- International finance --- Econometric models --- Emigrant remittances --- Emigration and immigration --- Russian Federation