Redrawing the Map of Global Capital Flows: The Role of Cross-Border Financing and Tax Havens
Antonio Coppola, Harvard University
Matteo Maggiori, Stanford University and NBER
Brent Neiman, University of Chicago and NBER
Jesse Schreger, Columbia University and NBER
Pierre-Olivier Gourinchas, University of California, Berkeley and NBER

Global firms finance themselves through foreign subsidiaries, often shell companies in tax havens, which obscures their nationality in aggregate statistics. Coppola, Maggiori, Neiman, and Schreger associate the universe of traded securities with their issuer's ultimate parent and restate bilateral investment positions to better reflect the true financial linkages connecting countries around the world. They find that private capital flows from developed countries to firms in large emerging markets are dramatically larger than previously thought. The national accounts of the United States, for example, understate the U.S. position in Chinese firms by nearly $600 billion, while China's official net creditor position to the rest of the world may be overstated by as much as 50 percent. The researchers additionally show how taking account of offshore issuance is important for their understanding of the currency composition of external liabilities, the nature of foreign direct investment, and the growth of financial globalization.

Labor Market Dynamics and Development
Kevin Donovan, Yale University
Jianyu Lu, Central Bank of Chile
Todd Schoellman, Federal Reserve Bank of Minneapolis
Niklas Engbom, New York University

We build a dataset of harmonized rotating panel labor force surveys covering 42 countries across a wide range of development and document three new empirical findings on how labor market dynamics vary with development. First, labor mar- ket flows (job-finding rates, employment exit rates, and job-to-job transition rates) are 2–3 times higher in the poorest as compared to the richest countries. Second, employment hazards decline more sharply with tenure in poorer countries; much of their high turnover can be attributed to high separation rates among workers with low tenure. Finally, wage-tenure profiles are much steeper in poorer countries. This last finding is surprising given that we also confirm the finding from the literature that wage-experience profiles are flatter in poorer countries. We show that these facts are consistent with theories with endogenous separation, particularly job ladder and learning models. Finally, we disaggregate our results and investigate possible driv- ing forces that might explain why separation operates differently in rich and poor countries.

Lumpy Durable Consumption Demand and the Limited Ammunition of Monetary Policy
Alisdair McKay, Federal Reserve Bank of Minneapolis
Johannes Wieland, University of California, San Diego and NBER
Arlene Wong, Princeton University and NBER

The prevailing neo-Wicksellian view holds that the central bank's objective is to track the natural rate of interest (r∗ ), which itself is largely exogenous to monetary policy. McKay and Wieland challenge this view using a fixed-cost model of durable consumption demand, in which expansionary monetary policy prompts households to accelerate the timing of lumpy durable adjustments. This yields an intertemporal trade-off in aggregate demand as encouraging households to adjust today leaves fewer households acquiring durables going forward. Interest rates must be kept low to support demand going forward, so accommodative monetary policy today reduces r∗ in the future. They show that this mechanism is quantitatively important in explaining the persistently
low level of real interest rates and r∗ after the Great Recession.

Tracking the COVID-19 Crisis with High-Resolution Transaction Data
Vasco M. Carvalho, University of Cambridge
Juan R. García, BBVA Research
Stephen Hansen, Imperial College London
Jose Rodriguez Mora, University of Edinburgh
Alvaro Ortiz, BBVA Research
Tomasa Rodrigo, BBVA Research
Jose Ruiz, BBVA Research
Michaela Pagel, Columbia University and NBER

Financial and payments systems throughout the world generate a vast amount
of naturally occurring, and digitally recorded, transaction data, but national statistical agencies mainly rely on surveys of much smaller scale for constructing official
economic series. This paper considers 2.1 billion transactions from credit- and debitcard data from BBVA, the second largest bank in Spain, as an alternative source
of information for measuring consumption, a key component of GDP. While card
spending growth is more volatile than non-durable consumption growth, normalized spending correlates strongly with official consumption measures. In the cross
section, patterns in card spending match those in official household budget surveys
very closely. The implication is that card spending can stand in for consumption
surveys in environments where official data is not available, for example due to reporting delays or to insufficient geographic or household detail. We apply the idea
of card spending as a consumption survey to the COVID-19 crisis in Spain, where
we present four findings: (1) a strong consumption reaction to lockdown and its
easing at the national and regional levels; (2) a rapid, V-shaped consumption recovery in the aggregate; (3) an adjustment to the average consumption basket during
lockdown towards the goods basket of low-income households; (4) a divergence in
mobility patterns during lockdown according to income in which poorer households
travel more during the workweek. Our main conclusion is that transaction data
provides high-quality information about household consumption, which makes it
a potentially important input into national statistics and research on household

The Macroeconomics of Epidemics
Martin S. Eichenbaum, Northwestern University and NBER
Sergio Rebelo, Northwestern University and NBER
Mathias Trabandt, Freie Universität Berlin
Andrew Atkeson, University of California, Los Angeles and NBER

Eichenbaum, Rebelo, and Trabandt extend the canonical epidemiology model to study the interaction between economic decisions and epidemics. Their model implies that people's decision to cut back on consumption and work reduces the severity of the epidemic, as measured by total deaths. These decisions exacerbate the size of the recession caused by the epidemic. The competitive equilibrium is not socially optimal because infected people do not fully internalize the effect of their economic decisions on the spread of the virus. In their benchmark model, the best simple containment policy increases the severity of the recession but saves roughly half a million lives in the U.S.

In addition to the conference paper, the research was distributed as NBER Working Paper w26882, which may be a more recent version.


Below is a list of conference attendees.
Simona Abis, Columbia University
Laura Castillo-Martinez, Duke University
Julieta Caunedo, Cornell University
Laurent Cavenaile, University of Toronto
Kevin Donovan, Yale University
Joao B. Duarte, Nova School of Business and Economics
Eran Hoffmann, Hebrew University
Tom Holden, Deutsche Bundesbank
David Jaume, Banco de Mexico
Baris Kaymak, University of Montreal
Elisa Keller, University of Exeter
Francois Le Grand, EM Lyon Business School
Sun K. Lee, Columbia University
Marc Lipsitch, Harvard University
Jianyu Lu, Central Bank of Chile
Clara Martínez-Toledano, Paris School of Economics
Preston Mui, University of California at Berkeley
Alvaro Ortiz, BBVA Research
Aseem Patel, Universitat Pompeu Fabra
Xincheng Qiu, University of Pennsylvania
Diego Ramos-Toro, Dartmouth College
Tomasa Rodrigo, BBVA Research
Jose Rodriguez Mora, University of Edinburgh
Martin Stuermer, Federal Reserve Bank of Dallas
Kai-Jie Wu, University of Rochester
Jianhong Xin, University of Pennsylvania
Choongryul Yang, Federal Reserve Board

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