Information about this author at RePEc
NBER Working Papers and Publications
|May 2004||Fear of Sudden Stops: Lessons from Australia and Chile|
with Ricardo Caballero, Kevin Cowan: w10519
Latin American economies are exposed to substantial external vulnerability. Domestic imbalances and terms of trade shocks are often exacerbated by sudden stops of capital inflow. In this paper we explore ways of overcoming external vulnerability, drawing lessons from a detailed comparison of the response of Chile and Australia to recent external shocks and from Australia's historical experience. We argue that in order to understand sudden stops and the mechanisms to smooth them, it is useful to identify and then distinguish between two inter-related dimensions of investors' confidence: country-trust and currency-trust. Lack of country-trust is a more fundamental and serious problem behind sudden stops. But lack of currency-trust may both be a source of country-trust problems and weaken a c...
Published: Ricardo J. Caballero & Kevin Cowan & Jonathan Kearns, 2005. "Fear of Sudden Stops: Lessons From Australia and Chile," The Journal of Policy Reform, vol 8(4), pages 313-354.
|July 2002||Identifying the Efficacy of Central Bank Interventions: The Australian Case|
with Roberto Rigobon: w9062
The endogeneity of exchange rates and intervention has long plagued studies of the effectiveness of central banks actions in foreign exchange markets. Researchers have either excluded contemporaneous intervention, so that their explanators are predetermined, or obtained a small, and typically incorrectly signed, coefficient on contemporaneous intervention. Failing to account for the endogeneity, when central banks lean against the wind and trade strategically, will likely result in a large downward bias to the coefficient on contemporaneous intervention -- explaining the negative coefficient frequently obtained. We use an alternative identification assumption, a change in Reserve Bank of Australia intervention policy, that allows us to estimate, using simulated GMM, a model that includes t...
Published: Kearns, Jonathan and Roberto Rigobon. "Identifying The Efficacy Of Central Bank Interventions: Evidence From Australia And Japan," Journal of International Economics, 2005, v66(1,May), 31-48.