Ozge Senay

Department of Economics
University of St. Andrews
St. Andrews, Fife KY16 9AL

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NBER Working Papers and Publications

January 2012Nominal Stability and Financial Globalization
with Michael B. Devereux, Alan Sutherland: w17796
Over the one and a half decades prior to the global financial crisis, advanced economies experienced a large growth in gross external portfolio positions. This phenomenon has been described as Financial Globalization. Over roughly the same time frame, most of these countries also saw a substantial fall in the level and variability of inflation. Many economists have conjectured that financial globalization contributed to the improved performance in the level and predictability of inflation. In this paper, we explore the causal link running in the opposite direction. We show that a monetary policy rule which reduces inflation variability leads to an increase in the size of gross external positions, both in equity and bond portfolios. This is a highly robust prediction of open economy macro m...

Published: Michael B. Devereux & Ozge Senay & Alan Sutherland, 2014. "Nominal Stability and Financial Globalization," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 46(5), pages 921-959, 08. citation courtesy of

September 2006Can Endogenous Changes in Price Flexibility Alter the Relative Welfare Performance of Exchange Rate Regimes?
with Alan Sutherland
in NBER International Seminar on Macroeconomics 2004, Richard H. Clarida, Jeffrey Frankel, Francesco Giavazzi and Kenneth D. West, editors
January 2005Can Endogenous Changes in Price Flexibility Alter the Relative Welfare Performance of Exchange Rate Regimes?
with Alan Sutherland: w11092
A dynamic general equilibrium model of a small open economy is presented where agents may choose the frequency of price changes. A fixed exchange rate is compared to inflation targeting and money targeting. A fixed rate generates more price flexibility than the other regimes when the expenditure switching effect is relatively weak, while money targeting generates more flexibility when the expenditure switching effect is strong. These endogenous changes in price flexibility can lead to changes in the welfare performance of regimes. But, for the model calibration considered here, the extra price flexibility generated by a peg does not compensate for the loss of monetary independence. Inflation targeting yields the highest welfare level despite generating the least price flexibility of the t...
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