Call for Papers: Capital Flows, Currency Wars and Monetary Policy

April 5-6, 2018
Cambridge, MA
Organizers: Emmanuel Farhi and Sebnem Kalemli-Ozcan

A decade of unconventional monetary policies by central banks in advanced countries has left them holding a major share of public debt. It has also contributed to historically low interest rates in rest of the world. The spillover effects of monetary policy, via capital flows and currency movements, can be large. They are likely to be time-varying and depend on global macroeconomic and financial conditions. Concern for these effects may place constraints on the conduct of monetary policy both in advanced countries and in emerging markets.

To investigate how central bank actions in one nation affect economic outcomes, and policy options, in others, the National Bureau of Economic Research (NBER) will convene a Universities Research Conference in Cambridge, Massachusetts on Thursday-Friday, April 5-6, 2018. The conference will explore how cross-border effects influence the conduct of monetary policy in both developed and emerging nations. It will also consider the potential welfare gains from coordinated versus uncoordinated policy in a global setting. To address these questions, research must measure the extent of international spillovers and the role of capital flows in creating spillovers. It must also investigate how these spillovers in turn affect the advanced countries.

The conference program will be organized by Emmanuel Farhi (Harvard and NBER) and Sebnem Kalemli-Ozcan (University of Maryland and NBER). There will be no published proceedings, but the conference will be summarized in the NBER Reporter and summaries of the presentations will be collected on a conference-related webpage.

The conference will include eight research papers. In addition, there will be a panel discussion of policy issues with remarks from Olivier Blanchard, Maurice Obstfeld, and Kenneth Rogoff.

Topics on which paper submissions would be welcome include, but are not limited to:

  • How could either conventional or unconventional monetary policies in the United States create a “currency war” with other developed or emerging market countries?
  • How can central banks and fiscal authorities in emerging markets respond to the spillovers of U.S. monetary policy, in particular to volatile capital flows? Can capital controls or FX intervention successfully reduce such spillovers? Which countries can employ capital controls and which countries cannot? Are there domestic costs of these policies?
  • Do capital controls in emerging markets have any spill-back effects to the U.S., for example by diverting capital flows to the U.S. or by affecting the value of the dollar?
  • Do emerging markets face a dilemma, with a trade-off between capital mobility and independent monetary policy, or a trilemma, with a trade-off between capital mobility, exchange rate flexibility, and independent monetary policy?
  • Are there differences between the Federal Reserve, the ECB, and the BOJ with regard to the global constraints that they face and the spillovers that their policies create?
  • How does U.S. monetary policy affect the operation and the attractiveness of common currency areas, such as the euro? How does it affect the costs and benefits more generally of fixed exchange rates in other countries?
Manuscripts for consideration for this meeting may be submitted at:

Submissions from scholars who are early in their careers, and from researchers who are not NBER affiliates, and from researchers from under-represented minority groups are encouraged. Papers that will be published by May 2018 should not be submitted. The deadline for submissions is January 15, 2018. Authors chosen to present papers will be notified by February 15, 2018. The NBER will pay the domestic travel and hotel expenses for one author per paper as well as for discussants at the conference. Questions about this meeting may be addressed to

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