This paper analyzes foreign reserve accumulation as a second-best policy in economies
with learning-by-investing externalities that arise disproportionately from the tradable sector …

We study the role of exchange rates in industrial policy. We construct an open-economy
macroeconomic framework with production externalities and show that the desirability of …

While substantial empirical research has evaluated the question of whether capital account
openness promotes economic growth, this paper finds empirical evidence for cases where …

This paper highlights a tradeoff implied by a policy of export-led growth through currency
undervaluation. While undervaluation can foster domestic manufacturing in countries like …

This paper studies the housing sector of Hong Kong and the role of collateral constraint in
modelling Hong Kong economy, through the lens of a small open economy DSGE model …

We document a new international stylized fact describing the relationship between real
exchange rates and external asset holdings. Economists have long argued that the real …

We document a new international stylized fact on the relationship between external wealth,
capital controls, and the real exchange rate. We first re-confirm that the real exchange rate …

Financially closed economies insure themselves against currentaccount shocks with
international reserves. We characterize the optimal level of reserves in a simple dynamic …

The canonical one-sector model over predicts international capital flows by a factor of ten.
We show that introducing a non-traded goods sector can reconcile the differences between …

Financially closed economies insure themselves against current-account shocks using
international reserves. We characterize the optimal management of reserves using an open …