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About the Author(s)

Frankel

Jeffrey Frankel is Harpel Professor of Capital Formation and Growth at Harvard University's Kennedy School. He directs the Program in International Finance and Macroeconomics at the National Bureau of Economic Research and is also a member of its Business Cycle Dating Committee, which officially declares the dates of U.S. recessions. Frankel was a senior staff economist at the President's Council of Economic Advisers in 1983-84, served as chief economist there in 1996-97, and was a Senate-confirmed appointee in 1997-99. Earlier in his career, he was professor of economics at the University of California, Berkeley, where he joined the faculty in 1979.

Frankel is a member of the Bellagio Group and advisory panels for the Federal Reserve Bank of New York and the Bureau of Economic Analysis. He was born in San Francisco, graduated from Swarthmore College, and received his Ph.D. in economics from MIT.

Endnotes

1. C. Reinhart, K. Rogoff, "Recovery from Financial Crises: Evidence from 100 Episodes," NBER Working Paper 19823, January 2014, and American Economic Review, 104(5), 2014, pp. 50-55.   Go to ⤴︎
2. J. Frankel, "The Global Financial Crisis: A Selective Review of Recent Research in the International Finance and Macroeconomics Program," NBER Reporter, 2, 2009. Go to ⤴︎
3. Examples include M. Devereux and C. Yu, "International Financial Integration and Crisis Contagion," NBER Working Paper 20526, September 2014; and O. Jeanne and A. Korinek, "Managing Credit Booms and Busts: A Pigouvian Taxation Approach," NBER Working Paper 16377, September 2010. Go to ⤴︎
4. J. Bianchi and E. Mendoza, "Overborrowing, Financial Crises, and 'Macroprudential' Taxes," NBER Working Paper 16091, June 2010, and Proceedings, Federal Reserve Bank of San Francisco, October 2010.   Go to ⤴︎
5. J. Bianchi, E. Boz, and E. Mendoza, "Macroprudential Policy in a Fisherian Model of Financial Innovation," NBER Working Paper 18036, and IMF Economic Review, 60(1), 2012, pp. 223-69.   Go to ⤴︎
6. O. Jeanne and A. Korinek, "Macroprudential Regulation Versus Mopping Up After the Crash," NBER Working Paper 18675, January 2013; J. Bianchi and E. Mendoza, "Optimal Time Consistent Macroprudential Policy," NBER Working Paper 19704, December 2013; and J. Bianchi, "Efficient Bailouts?" NBER Working Paper 18587, December 2012. Go to ⤴︎
7. J. Bianchi and S. Bigio, "Banks, Liquidity Management and Monetary Policy," NBER Working Paper 20490, September 2014.   Go to ⤴︎
8. E. Farhi and I. Werning, "A Theory of Macroprudential Policies in the Presence of Nominal Rigidities," NBER Working Paper 19313, September 2013; and A. Korinek and A. Simsek, "Liquidity Trap and Excessive Leverage," NBER Working Paper 19970, March 2014.   Go to ⤴︎
9. C. Buch and L. S. Goldberg, "International Banking and Liquidity Risk Transmission: Lessons from Across Countries," NBER Working Paper 20286, July 2014.   Go to ⤴︎
10. A. Kashyap, D. Tsomocos, and A. Vardoulakis, "How Does Macroprudential Regulation Change Bank Credit Supply?" NBER Working Paper 20165, May 2014.   Go to ⤴︎
11. E. Farhi and J. Tirole, "Collective Moral Hazard, Maturity Mismatch, and Systemic Bailouts," NBER Working Paper 15138, July 2009, and American Economic Review, 102(1), 2009, pp. 60-93.   Go to ⤴︎
12. A. Demirgüç-Kunt, E. Kane and L. Laeven, "Deposit Insurance Database," NBER Working Paper 20278, July 2014.   Go to ⤴︎
13. V. Acharya, R. Engle, and D. Pierret, "Testing Macroprudential Stress Tests: The Risk of Regulatory Risk Weights," NBER Working Paper 18968, April 2013.   Go to ⤴︎
14. B. Eichengreen and N. Dincer, "Who Should Supervise? The Structure of Bank Supervision and the Performance of the Financial System?" NBER Working Paper 17401, September 2011, and International Finance, 15(3), 2012, pp. 309-25 (published as "The Architecture and Governance of Financial Supervision: Sources and Implications.") Using observations for 140 countries from 1998 through 2010, the authors find that supervisory responsibility tends to be assigned to the central bank in low-income countries.   Go to ⤴︎
15. P. Federico, C. Végh, and G. Vuletin, "Reserve Requirement Policy over the Business Cycle," NBER Working Paper 20612, October 2014, and "Effects and Role of Macroprudential Policy: Evidence from Reserve Requirements Based on a Narrative Approach," presented at the 2014 Central Bank of the Republic of Turkey-NBER Conference on Monetary Policy and Financial Stability in Emerging Economies.   Go to ⤴︎
16. O. Jordà, M. Schularick and A. M. Taylor, "Betting the House," NBER Working Paper 20771, December 2014, and forthcoming in Journal of International Economics; M. Bordo and J. Landon-Lane, "What Explains House Price Booms?: History and Empirical Evidence," NBER Working Paper 19584, October 2013; and J. Aizenman and Y. Jinjarak, "Real Estate Valuation, Current Account, and Credit Growth Patterns, Before and After the 2008-09 Crisis," NBER Working Paper 19190, June 2013, and Journal of International Money and Finance, 48(PB), 2014, pp. 249-70.   Go to ⤴︎
17. K. N. Kuttner and I. Shim, "Can Non-Interest Rate Policies Stabilize Housing Markets? Evidence from a Panel of 57 Economies," NBER Working Paper 19362, December 2013.   Go to ⤴︎
18. J. Frankel, "Monetary Policy in Emerging Markets: A Survey," NBER Working Paper 16125, June 2010, and B. Friedman and M. Woodford, eds., Handbook of Monetary Economics, Amsterdam, The Netherlands: North Holland, 2011, pp. 1442-1520. Go to ⤴︎
19. A. Korinek and E. Mendoza, "From Sudden Stops to Fisherian Deflation: Quantitative Theory and Policy Implications," NBER Working Paper 19362, August 2013. Go to ⤴︎
20. J. H. Hahm, F. Mishkin, H. S. Shin, and K. Shin, "Macroprudential Policies in Open Emerging Economies," NBER Working Paper 17780, January 2012; and V. Bruno and H. S. Shin, "Assessing Macroprudential Policies: Case of Korea," NBER Working Paper 19804, May 2013.   Go to ⤴︎
21. S. Aiyar, C. Calomiris, and T. Wieladek, "Does Macro-Pru Leak? Evidence from a U.K. Policy Experiment," NBER Working Paper 17822, February 2012. Go to ⤴︎
22. C. Engel, "Macroprudential Policy in a World of High Capital Mobility: Policy Implications from an Academic Perspective," NBER Working Paper 20951, February 2015.   Go to ⤴︎
23. K. Forbes, M. Fratzscher and R. Straub, "Capital Controls and Macroprudential Measures: What Are They Good For?" NBER Working Paper 20860, January 2015, and forthcoming, Journal of International Economics. Go to ⤴︎
24. A. Korinek and D. Sandri, "Capital Controls or Macroprudential Regulation?" NBER Working Paper 20805, December 2014.   Go to ⤴︎
25. E. Farhi and I.Werning, "Dealing with the Trilemma: Optimal Capital Controls with Fixed Exchange Rates," NBER Working Paper 18199, June 2012; S. Schmitt-Grohe and M. Uribe, "Prudential Policy for Peggers," NBER Working Paper 18031, May 2012.   Go to ⤴︎
26. M. Klein, "Capital Controls: Gates versus Walls," NBER Working Paper 18526, November 2012, and Brookings Papers on Economic Activity, 45(2), 2012, pp. 317-67; A. Fernández, M. Klein, A. Rebucci, M. Schindler, and M. Uribe, "Capital Control Measures: A New Dataset," NBER Working Paper 20970, February 2015. The authors provide a detailed new dataset of capital control restrictions on both inflows and outflows for 100 countries over the period 1995 to 2013.   Go to ⤴︎
27. O. Jeanne, "Capital Account Policies and the Real Exchange Rate," NBER Working Paper 18404, September 2012, and F. Giavazzi and K. West, eds., NBER International Seminar on Macroeconomics, Chicago, Illinois: University of Chicago Press, 2013, pp. 7-42.   Go to ⤴︎
28. L. Alfaro, A. Chari, and F. Kanczuk, "The Real Effects of Capital Controls: Liquidity Constraints and Firm Investment," NBER Working Paper 20726, December 2014, and presented at the 2014 Central Bank of the Republic of Turkey-NBER Conference on Monetary Policy and Financial Stability in Emerging Economies.   Go to ⤴︎
29. J. Bengui and J. Bianchi, "Capital Flow Management when Capital Controls Leak," presented at 2014 Central Bank of the Republic of Turkey-NBER Conference on Monetary Policy and Financial Stability in Emerging Economies. Go to ⤴︎
30. N. Magud, C. Reinhart, and K. Rogoff, "Capital Controls: Myth and Reality &– A Portfolio Balance Approach," NBER Working Paper 16805, February 2011; and M. Brunnermeier and Y. Sannikov, "International Credit Flows and Pecuniary Externalities," NBER Working Paper 20803, December 2014.   Go to ⤴︎
31. H. S. Shin an K. Shin, "Procyclicality and Monetary Aggregates," NBER Working Paper 16836, February 2011. During a boom phase in bank lending, which is reflected in monetary aggregates, banks increasingly look beyond their "core" funding source, deposits, to other funding sources, which increases vulnerability.   Go to ⤴︎
32. A. Bénétrix, P. Lane, and J. Shambaugh, "International Currency Exposures, Valuation Effects, and the Global Financial Crisis," NBER Working Paper 20820, January 2015, and forthcoming, Journal of International Economics.   Go to ⤴︎
33. M. Qureshi, J. Ostry, A. R. Ghosh, and M. Chamon, "Managing Capital Inflows: The Role of Capital Controls and Prudential Policies," NBER Working Paper 17363, August 2011, and Journal of International Economics, 88(2), 2012, pp. 407-21.   Go to ⤴︎
34. M. Obstfeld, "The International Monetary System: Living with Asymmetry," NBER Working Paper 17641, December 2011; P. Gourinchas and O. Jeanne, "Capital Flows to Developing Countries: The Allocation Puzzle," NBER Working Paper 13602, November 2007, and Review of Economic Studies, 80(4), 2013, pp. 1484-1515.   Go to ⤴︎
35. K. Dominguez, Y. Hashimoto, and T. Ito, "International Reserves and the Global Financial Crisis," NBER Working Paper 17362, August 2011, and Journal of International Economics, 88(2), 2012, pp. 388-406; M. Bussière, G. Cheng, M. Chinn, and N. Lisack, "For a Few Dollars More: Reserves and Growth in Times of Crises" NBER Working Paper 19791, January 2014; J. Frankel and G. Saravelos, "Are Leading Indicators of Financial Crises Useful for Assessing Country Vulnerability? Evidence from the 2008-09 Global Crisis," NBER Working Paper 16047, June 2010, and Journal of International Economics, 87(2), 2012, pp. 216-31.   Go to ⤴︎
36. J. Aizenman, "Hoarding International Reserves Versus a Pigovian Tax-Cum-Subsidy Scheme: Reflections on the Deleveraging Crisis of 2008-09, and a Cost Benefit Analysis," NBER Working Paper 15484, November 2009, and Journal of Economic Dynamics and Control, 35(9), 2011, pp.1502-13; J. Aizenman and M. Hutchison, "Exchange Market Pressure and Absorption by International Reserves: Emerging Markets and Fear of Reserve Loss During the 2008-09 Crisis," NBER Working Paper 16260, September 2010, and Journal of International Money and Finance, 31(5), 2012, pp. 1076-91.   Go to ⤴︎
37. J. Aizenman, Y.W. Cheung, and H. Ito, "International Reserves Before and After the Global Crisis: Is There No End to Hoarding?" NBER Working Paper 20386, August 2014. Macro-prudential policy tends to complement IR accumulation.   Go to ⤴︎
38. A. Rose and M. Spiegel, "Cross-country Causes and Consequences of the Crisis: An Update," NBER Working Paper 16243, July 2011, and European Economic Review, 55(3), 2011, pp. 309-24. Go to ⤴︎
39. C. Végh and G. Vuletin, "The Road to Redemption: Policy Response to Crises in Latin America," NBER Working Paper 20675, November 2014, and IMF Economic Review, 62(4), 2014, pp. 526-68.   Go to ⤴︎
40. Two papers at the 2014 Central Bank of the Republic of Turkey-NBER Conference on Monetary Policy and Financial Stability in Emerging Economies considered the menu of possible responses: K. Forbes and M. W. Klein, "Shifting from a Salsa to a Waltz: The Consequences of Policy Responses During Global Booms," and O. Blanchard, J. Ostry, A. R. Ghosh, and M. Chamon, "Managing Capital Flows: How to Combine Capital Controls, Macro Prudential Tools, FX Intervention, and the Policy Rate." Other research looks at how the menu of options was deployed after crises hit, in 1997-98 and 2008-09: K. Forbes and M. Klein, "Pick Your Poison: The Choices and Consequences of Policy Responses to Crises," NBER Working Paper 20987, February 2015.   Go to ⤴︎
41. G. Hale and M. Obstfeld, "The Euro and the Geography of International Debt Flows," NBER Working Paper  20033, April 2014.   Go to ⤴︎
42. Developing countries apparently are converging on an intermediate choice of partial exchange rate flexibility, partial financial openness, and partial monetary policy independence. J. Aizenman and H. Ito, "Living with the Trilemma Constraint: Relative Trilemma Policy Divergence, Crises, and Output Losses for Developing Countries," NBER Working Paper 19448, September 2013, and Journal of International Money and Finance, 49(PA), pp. 28-51; J. Aizenman and H. Ito, "Trilemma Policy Convergence Patterns and Output Volatility," NBER Working Paper 17806, February 2012, and North American Journal of Economics and Finance, 23(3), 2012, pp. 269-85; J. Aizenman, M. Chinn, and H. Ito, "Surfing the Waves of Globalization: Asia and Financial Globalization in the Context of the Trilemma," NBER Working Paper 15876, April 2010, and Journal of the Japanese and International Economies, 25(3), 2011, pp. 290-320; and M. Klein and J. Shambaugh, "Rounding the Corners of the Policy Trilemma: Sources of Monetary Policy Autonomy," NBER Working Paper 19461, September 2013.   Go to ⤴︎
43. E. Farhi and I. Werning, "Dilemma not Trilemma? Capital Controls and Exchange Rates with Volatile Capital Flows," presented at 2014 Central Bank of the Republic of Turkey-NBER Conference on Monetary Policy and Financial Stability in Emerging Economies; and X. Gabaix and M. Maggiori, "International Liquidity and Exchange Rate Dynamics," NBER Working Paper 19854, January 2014.   Go to ⤴︎
44. G. Pasricha, M. Falagiarda, M. Bijsterbosch, and J. Aizenman, "Domestic and Multilateral Effects of Capital Controls in Emerging Markets," NBER Working Paper 20822, January 2015. Go to ⤴︎
45. K. Forbes and F. Warnock, "Capital Flow Waves: Surges, Stops, Flight, and Retrenchment," NBER Working Paper 17351, August 2011, and Journal of International Economics, 88(2), 2012, pp. 235-51.   Go to ⤴︎
46. S. Agrippino and H. Rey, "World Asset Markets and the Global Financial Cycle," NBER Summer Institute, June 2014; and E. Passari and H. Rey, "Financial Flows and the International Monetary System," NBER Working Paper 21172, May 2015.   Go to ⤴︎
47. K. Daniel, R. Hodrick, and Z. Lu, "The Carry Trade: Risks and Drawdowns," NBER Working Paper 20433, August 2014.   Go to ⤴︎
48. H. Rey, "Dilemma not Trilemma: The Global Financial Cycle and Monetary Policy Independence," NBER Working Paper 21162, May 2015; and presented at Jackson Hole Economic Symposium 2013, Federal Reserve Bank of Kansas City.   Go to ⤴︎
49. M. Devereux and J. Yetman, "Capital Controls, Global Liquidity Traps and the International Policy Trilemma," NBER Working Paper 19091, May 2013.   Go to ⤴︎
50. B. Eichengreen, "Does the Federal Reserve Care About the Rest of the World?" NBER Working Paper 19405, September 2013.   Go to ⤴︎
51. B. Eichengreen, "International Policy Coordination: The Long View," NBER Working Paper 17665, December 2011, and in R. Feenstra and A. Taylor, eds., Globalization in an Age of Crisis: Multilateral Economic Cooperation in the Twenty-First Century, Chicago, Illinois: University of Chicago Press, 2014, pp. 43-82; and C. Engel, "Central Bank Coordination," NBER Working Paper 20952, February 2015.   Go to ⤴︎
52. O. Jeanne, "Macroprudential Policies in a Global Perspective," NBER Working Paper 19967, March 2014, and in Prospects for Asia and the Global Economy, Asia Economic Policy Conference, Federal Reserve Bank of San Francisco. Go to ⤴︎

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