In emerging economies, fiscal and monetary rules enhance welfare. Nonetheless, suspending these rules during large, unexpected crises can help stabilize GDP, employment and external trade. Flexible monetary policy proved particularly valuable during the COVID-19 crisis.

Authors show that financial crises in developing countries trigger a surge in offshore deposits: three years after a crisis, tax-haven bank deposits rise by almost 30%. The effect is strongest where institutions are weak, revealing how havens drain resources when most needed.

An interest rate uncertainty rule discourages short-term bond inflows, tilts flows toward FDI, and can improve welfare when inflows are driven by foreign uncertainty shocks—but if inflows come from level shocks, IRUPT worsens domestic vs. external policy trade-offs.

Domestic service trade drives regional specialization and heterogeneous welfare gains, reducing disparities, while international service trade yields more uniform benefits. Using Canadian data and a spatial model, the paper quantifies sizable welfare impacts.

On Jan 7, 2025, a technical error cut Argentina’s EMBI spread by 114 bps, creating a rare natural experiment. Using DiD, IV & intraday data, we show Argentine stocks jumped as investors updated beliefs based on a mispriced signal.

Endogenous borrowing constraints create a prudential motive for fiscal policy. Under the Ramsey-optimal plan, the government limits fiscal easing during crises, curbing overborrowing ex-ante and enhancing financial stability.

Authors investigate how credit availability affects the organization of firms’ labor. They construct an instrument for firm’s credit supply based on firm-bank credit linkages and conduct an event study on the decision to reorganize the labor force using Portugal data.

"This paper analyzes the effect of resolving trade policy uncertainty on innovation
in China from 1990 to 2007. Reducing tariff uncertainty is show to have generated economically and statistically significant increases in innovation.

Authors show that short-term liquidity is a source of competitive advantage, enabling investment in intangibles. Exploiting a French reform capping payment delays, they find that higher liquidity boosted intangibles, raising markups and market shares.

Authors estimate international spillovers from both conventional and unconventional US monetary policy, using exogenous variation in conventional policy, forward guidance and large-scale asset purchases, based on high-frequency asset price surprises around Fed communications