Pub Date : 2025-12-04DOI: 10.1016/j.jimonfin.2025.103498
Fabio Fornari , Daniele Pianeselli , Andrea Zaghini
We provide empirical evidence that the pricing of green bonds tends to be highly sophisticated and is based on a two-tiered approach. When buying a green bond, investors do not look only at the presence of a green label, but also consider additional characteristics of the bond that involve the environmental score of the issuer and the soundness of the underlying project. By comparing the yields at issuance of green bonds to those of a matched control sample of conventional bonds, our baseline specification identifies a premium of 16 basis points for the green label alone. Furthermore, when the environmental score of the issuer is in the top tercile of the cross-sectional distribution, the greenium increases potentially doubling. Green certification and periods of heightened climate uncertainty also significantly affect the size of the greenium.
{"title":"Environmental score and bond pricing: It better be good, it better be green","authors":"Fabio Fornari , Daniele Pianeselli , Andrea Zaghini","doi":"10.1016/j.jimonfin.2025.103498","DOIUrl":"10.1016/j.jimonfin.2025.103498","url":null,"abstract":"<div><div>We provide empirical evidence that the pricing of green bonds tends to be highly sophisticated and is based on a two-tiered approach. When buying a green bond, investors do not look only at the presence of a green label, but also consider additional characteristics of the bond that involve the environmental score of the issuer and the soundness of the underlying project. By comparing the yields at issuance of green bonds to those of a matched control sample of conventional bonds, our baseline specification identifies a premium of 16 basis points for the green label alone. Furthermore, when the environmental score of the issuer is in the top tercile of the cross-sectional distribution, the greenium increases potentially doubling. Green certification and periods of heightened climate uncertainty also significantly affect the size of the greenium.</div></div>","PeriodicalId":48331,"journal":{"name":"Journal of International Money and Finance","volume":"161 ","pages":"Article 103498"},"PeriodicalIF":3.3,"publicationDate":"2025-12-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145797136","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-04DOI: 10.1016/j.jimonfin.2025.103495
Nico Petz , Thomas O. Zörner
This paper analyzes business cycle synchronization and the Phillips curve relationship in Central, Eastern, and Southeastern European (CESEE) economies relative to the euro area. Using business cycles extracted with a Kalman filter and applying several synchronization measures, we find that CESEE EU countries are more closely aligned with the euro area than their non-EU counterparts. Heterogeneities are most pronounced during the early 2000s, the global financial crisis, and the euro crisis. We find strong evidence of a time-varying unemployment-inflation relationship, with a post-COVID-19 steepening of the Phillips curve and negative slope coefficients in nearly all countries. Phillips curve slopes increasingly converge toward the euro area, particularly among EU members whose post-2022 dynamics are closely aligned. These results highlight the role of EU membership in fostering economic synchronization and the need to account for time variation when assessing convergence in the face of major shocks.
{"title":"How Phillips curve dynamics enhance business cycle synchronization analysis in Central and Eastern Europe","authors":"Nico Petz , Thomas O. Zörner","doi":"10.1016/j.jimonfin.2025.103495","DOIUrl":"10.1016/j.jimonfin.2025.103495","url":null,"abstract":"<div><div>This paper analyzes business cycle synchronization and the Phillips curve relationship in Central, Eastern, and Southeastern European (CESEE) economies relative to the euro area. Using business cycles extracted with a Kalman filter and applying several synchronization measures, we find that CESEE EU countries are more closely aligned with the euro area than their non-EU counterparts. Heterogeneities are most pronounced during the early 2000s, the global financial crisis, and the euro crisis. We find strong evidence of a time-varying unemployment-inflation relationship, with a post-COVID-19 steepening of the Phillips curve and negative slope coefficients in nearly all countries. Phillips curve slopes increasingly converge toward the euro area, particularly among EU members whose post-2022 dynamics are closely aligned. These results highlight the role of EU membership in fostering economic synchronization and the need to account for time variation when assessing convergence in the face of major shocks.</div></div>","PeriodicalId":48331,"journal":{"name":"Journal of International Money and Finance","volume":"161 ","pages":"Article 103495"},"PeriodicalIF":3.3,"publicationDate":"2025-12-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145748024","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-04DOI: 10.1016/j.jimonfin.2025.103504
Joshua Aizenman , Hiro Ito , Donghyun Park , Jamel Saadaoui , Gazi Salah Uddin
The Global Financial Crisis and the COVID-19 pandemic were two major shocks to the world economy in the 21st century. In this study, we analyze the patterns of recessions and recoveries of 101 advanced and developing economies. We identify the turning points of recessions and expansions between 1990 and 2022, and perform cross-country analysis of domestic and external drivers of economic recovery. In addition to the standard independent variables, we include institutional development, political stability, the extent of democracy, and trade restrictions indexes, and explore their roles in explaining recessions and recovery patterns. For the whole sample, we find that deeper recessions are followed by stronger recoveries, in line with Friedman’s plucking model of the business cycle. However, the empirical evidence for the plucking model becomes weaker if institutional development is limited and trade restrictions are high. We show that recessions that create conflict and trade tensions differ sharply from those that do not, a relevant finding in the current global climate of heightened trade tensions and geopolitical uncertainty. Finally, since developing countries tend to have weaker institutions and higher trade barriers, our evidence suggests that countercyclical monetary and fiscal policy will have to play a bigger role in cushioning global shocks in those countries. This, in turn, requires more robust and credible monetary and fiscal policy frameworks.
{"title":"Global shocks, institutional development, and trade restrictions: What can we learn from crises and recoveries between 1990 and 2022?","authors":"Joshua Aizenman , Hiro Ito , Donghyun Park , Jamel Saadaoui , Gazi Salah Uddin","doi":"10.1016/j.jimonfin.2025.103504","DOIUrl":"10.1016/j.jimonfin.2025.103504","url":null,"abstract":"<div><div>The Global Financial Crisis and the COVID-19 pandemic were two major shocks to the world economy in the 21st century. In this study, we analyze the patterns of recessions and recoveries of 101 advanced and developing economies. We identify the turning points of recessions and expansions between 1990 and 2022, and perform cross-country analysis of domestic and external drivers of economic recovery. In addition to the standard independent variables, we include institutional development, political stability, the extent of democracy, and trade restrictions indexes, and explore their roles in explaining recessions and recovery patterns. For the whole sample, we find that deeper recessions are followed by stronger recoveries, in line with Friedman’s plucking model of the business cycle. However, the empirical evidence for the plucking model becomes weaker if institutional development is limited and trade restrictions are high. We show that recessions that create conflict and trade tensions differ sharply from those that do not, a relevant finding in the current global climate of heightened trade tensions and geopolitical uncertainty. Finally, since developing countries tend to have weaker institutions and higher trade barriers, our evidence suggests that countercyclical monetary and fiscal policy will have to play a bigger role in cushioning global shocks in those countries. This, in turn, requires more robust and credible monetary and fiscal policy frameworks.</div></div>","PeriodicalId":48331,"journal":{"name":"Journal of International Money and Finance","volume":"161 ","pages":"Article 103504"},"PeriodicalIF":3.3,"publicationDate":"2025-12-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145748022","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-03DOI: 10.1016/j.jimonfin.2025.103502
Barry Eichengreen , Akiko Terada-Hagiwara , Yothin Jinjarak
In many respects, the challenges of local government debts in the People's Republic of China (PRC) parallel those faced by members of the European Union, which also contend with high deficits and debts in a currency union. European fiscal rules shed light on issues for the PRC, including the difficulty in assessing fiscal compliance, the necessity of adaptable governance, the intricacies of political processes, and enforcement challenges in operating fiscal rules. Our assessment points to the significance of context-specific strategies for addressing local government debts with a rule-based fiscal framework for it to be operational for the PRC. We provide corroborating evidence from PRC provinces, Euro member states, and German Länder.
{"title":"Fiscal rules in monetary union: insights from Europe for the PRC","authors":"Barry Eichengreen , Akiko Terada-Hagiwara , Yothin Jinjarak","doi":"10.1016/j.jimonfin.2025.103502","DOIUrl":"10.1016/j.jimonfin.2025.103502","url":null,"abstract":"<div><div>In many respects, the challenges of local government debts in the People's Republic of China (PRC) parallel those faced by members of the European Union, which also contend with high deficits and debts in a currency union. European fiscal rules shed light on issues for the PRC, including the difficulty in assessing fiscal compliance, the necessity of adaptable governance, the intricacies of political processes, and enforcement challenges in operating fiscal rules. Our assessment points to the significance of context-specific strategies for addressing local government debts with a rule-based fiscal framework for it to be operational for the PRC. We provide corroborating evidence from PRC provinces, Euro member states, and German Länder.</div></div>","PeriodicalId":48331,"journal":{"name":"Journal of International Money and Finance","volume":"162 ","pages":"Article 103502"},"PeriodicalIF":3.3,"publicationDate":"2025-12-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145929039","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Using a market-indicator-based approach, this paper empirically examines whether the stability of the US and EU financial systems is affected by the digital finance revolution driven by BigTechs, FinTechs, and crypto-assets. These three sectors display different downside volatility profiles, with financial intermediaries being particularly sensitive to shocks from the crypto ecosystem only under extremely severe downturns, which are prevented in regulated equity markets. In that vein, we provide evidence that the Markets in Crypto Assets Regulation reduced financial systemic risk in EU. Overall, our empirical analysis shows that markets perceive the performance and riskiness of tech-driven companies and assets in differentiated ways, and that the transmission of shocks from digital finance ecosystems operates uniquely under varying conditions of systemic stress. Finally, we also document asymmetric spillover effects between advanced and emerging economies, with shock transmission from the US and EU to emerging markets being systematically stronger than in the reverse direction.
{"title":"Decoding the digital finance revolution: How BigTechs, FinTechs and crypto-assets shape financial systemic risk in US and EU","authors":"Domenico Curcio , Simona D’Amico , Iftekhar Hasan , Davide Vioto","doi":"10.1016/j.jimonfin.2025.103493","DOIUrl":"10.1016/j.jimonfin.2025.103493","url":null,"abstract":"<div><div>Using a market-indicator-based approach, this paper empirically examines whether the stability of the US and EU financial systems is affected by the digital finance revolution driven by BigTechs, FinTechs, and crypto-assets. These three sectors display different downside volatility profiles, with financial intermediaries being particularly sensitive to shocks from the crypto ecosystem only under extremely severe downturns, which are prevented in regulated equity markets. In that vein, we provide evidence that the Markets in Crypto Assets Regulation reduced financial systemic risk in EU. Overall, our empirical analysis shows that markets perceive the performance and riskiness of tech-driven companies and assets in differentiated ways, and that the transmission of shocks from digital finance ecosystems operates uniquely under varying conditions of systemic stress. Finally, we also document asymmetric spillover effects between advanced and emerging economies, with shock transmission from the US and EU to emerging markets being systematically stronger than in the reverse direction.</div></div>","PeriodicalId":48331,"journal":{"name":"Journal of International Money and Finance","volume":"161 ","pages":"Article 103493"},"PeriodicalIF":3.3,"publicationDate":"2025-12-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145748023","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-02DOI: 10.1016/j.jimonfin.2025.103492
Georgii Zvonka
We introduce tokenization as a way to upgrade Bitcoin and analyze how it affects Bitcoin’s value. The tokenization possibility explains Bitcoin’s current high valuation despite expectations that declining mining rewards will reduce security. We develop a new monetarist model with two monetary standards, network effects, and transaction costs from congestion and declining security. Without tokenization options, the model predicts a zero Bitcoin price given declining security. With tokenization, the transition may be delayed by trade-offs between network effects and congestion on Bitcoin’s blockchain versus those on a new monetary standard. As Bitcoin’s security declines, this balance shifts toward the new standard, generating equilibria where Bitcoin’s price rises with token adoption. Bitcoin-backed tokens already exist (e.g., WBTC), demonstrating practical feasibility, though empirical evidence reveals that trust in token issuers remains critical. To address this trust issue, we propose a simple soft-fork mechanism.
{"title":"Tokenization: a potential pathway for Bitcoin’s future","authors":"Georgii Zvonka","doi":"10.1016/j.jimonfin.2025.103492","DOIUrl":"10.1016/j.jimonfin.2025.103492","url":null,"abstract":"<div><div>We introduce tokenization as a way to upgrade Bitcoin and analyze how it affects Bitcoin’s value. The tokenization possibility explains Bitcoin’s current high valuation despite expectations that declining mining rewards will reduce security. We develop a new monetarist model with two monetary standards, network effects, and transaction costs from congestion and declining security. Without tokenization options, the model predicts a zero Bitcoin price given declining security. With tokenization, the transition may be delayed by trade-offs between network effects and congestion on Bitcoin’s blockchain versus those on a new monetary standard. As Bitcoin’s security declines, this balance shifts toward the new standard, generating equilibria where Bitcoin’s price rises with token adoption. Bitcoin-backed tokens already exist (e.g., WBTC), demonstrating practical feasibility, though empirical evidence reveals that trust in token issuers remains critical. To address this trust issue, we propose a simple soft-fork mechanism.</div></div>","PeriodicalId":48331,"journal":{"name":"Journal of International Money and Finance","volume":"161 ","pages":"Article 103492"},"PeriodicalIF":3.3,"publicationDate":"2025-12-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145797138","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-01DOI: 10.1016/j.jimonfin.2025.103496
Bruno Albuquerque , Eugenio Cerutti , Yosuke Kido , Richard Varghese
This paper shows that not all housing price cycles are alike. The speed and persistence of house price increases during housing expansions are key determinants of both the severity of the subsequent downturn and the net macroeconomic impact over the cycle. Analyzing 180 housing expansions across 68 countries, we classify 49 % as housing booms, characterized by rapid and persistent real house price increases. We find that economic downturns are significantly deeper and longer when housing contractions are preceded by a housing boom. The housing contraction is more severe the more intense the preceding housing boom, and when accompanied by a credit boom. Overall, while housing booms spur stronger economic growth during the expansion phase, their sharp reversals lead to severe housing contractions, resulting in significant net negative effects on the real economy.
{"title":"Not all housing cycles are created equal: Macroeconomic consequences of housing booms","authors":"Bruno Albuquerque , Eugenio Cerutti , Yosuke Kido , Richard Varghese","doi":"10.1016/j.jimonfin.2025.103496","DOIUrl":"10.1016/j.jimonfin.2025.103496","url":null,"abstract":"<div><div>This paper shows that not all housing price cycles are alike. The speed and persistence of house price increases during housing expansions are key determinants of both the severity of the subsequent downturn and the net macroeconomic impact over the cycle. Analyzing 180 housing expansions across 68 countries, we classify 49 % as housing booms, characterized by rapid and persistent real house price increases. We find that economic downturns are significantly deeper and longer when housing contractions are preceded by a housing boom. The housing contraction is more severe the more intense the preceding housing boom, and when accompanied by a credit boom. Overall, while housing booms spur stronger economic growth during the expansion phase, their sharp reversals lead to severe housing contractions, resulting in significant net negative effects on the real economy.</div></div>","PeriodicalId":48331,"journal":{"name":"Journal of International Money and Finance","volume":"161 ","pages":"Article 103496"},"PeriodicalIF":3.3,"publicationDate":"2025-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145694233","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-01DOI: 10.1016/j.jimonfin.2025.103497
Yuanyuan Li , Xun Wang , Jingwen Yu
The transmission mechanisms of global liquidity shocks have garnered significant attention, particularly in the context of emerging market economies. This study contributes to this literature by empirically examining a novel household income channel through which foreign-owned enterprises (FOEs) propagate US monetary policy shocks to host countries. Leveraging a large Chinese individual-level survey dataset, we uncover a hitherto understudied mechanism linking external monetary tightening to income dynamics in the private sector. Tightening US monetary policy shocks exhibit a significantly larger contractionary effect on individuals employed in FOEs relative to those in non-FOEs. These spillover effects are more pronounced for individuals working in industries with greater external financial dependence and in provinces with less developed financial sector. Moreover, the income dampening effect of US monetary policy shocks through FOEs affects household consumption, and households with greater financing constraints are more prominently affected. Our paper provides new insights into how FOEs act as transmission intermediaries for external liquidity shocks, affecting the host country’s economy.
{"title":"FOEs and the transmission of US monetary policy shocks: Evidence from China","authors":"Yuanyuan Li , Xun Wang , Jingwen Yu","doi":"10.1016/j.jimonfin.2025.103497","DOIUrl":"10.1016/j.jimonfin.2025.103497","url":null,"abstract":"<div><div>The transmission mechanisms of global liquidity shocks have garnered significant attention, particularly in the context of emerging market economies. This study contributes to this literature by empirically examining a novel household income channel through which foreign-owned enterprises (FOEs) propagate US monetary policy shocks to host countries. Leveraging a large Chinese individual-level survey dataset, we uncover a hitherto understudied mechanism linking external monetary tightening to income dynamics in the private sector. Tightening US monetary policy shocks exhibit a significantly larger contractionary effect on individuals employed in FOEs relative to those in non-FOEs. These spillover effects are more pronounced for individuals working in industries with greater external financial dependence and in provinces with less developed financial sector. Moreover, the income dampening effect of US monetary policy shocks through FOEs affects household consumption, and households with greater financing constraints are more prominently affected. Our paper provides new insights into how FOEs act as transmission intermediaries for external liquidity shocks, affecting the host country’s economy.</div></div>","PeriodicalId":48331,"journal":{"name":"Journal of International Money and Finance","volume":"161 ","pages":"Article 103497"},"PeriodicalIF":3.3,"publicationDate":"2025-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145748021","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-27DOI: 10.1016/j.jimonfin.2025.103488
Helmut Herwartz , Christian Ochsner , Hannes Rohloff
Pointing to the prominent role of global shocks in determining financial outcomes, global credit aggregates and indicators of country-specific credit market stress co-move to a significant extent. In this work, we examine the transmission of global credit supply shocks associated with governments, businesses and households to the country level. In a data-rich environment, we show that a substantial amount of variation in credit aggregates and interest rates is explained by common global credit supply components. In addition, we find that real risk and term premia and their associated uncertainties (i.e., realized volatilities) transmit global shocks to country-level debt and equity markets. However, effect magnitudes and signs are heterogeneous across sectors, and highlight the relevance of sector-specific credit market monitoring. For instance, whereas global government credit supply eases financial pressures, acting as safe-haven lending, global household credit supply shocks significantly increase risk and liquidity premia across the globe. An investigation of monetary policy effects of major central banks (Fed, ECB, BoE, BoJ) on global credit supply reveals important transmission heterogeneities of conventional versus unconventional policies.
{"title":"How do credit supply conditions transmit across the globe?","authors":"Helmut Herwartz , Christian Ochsner , Hannes Rohloff","doi":"10.1016/j.jimonfin.2025.103488","DOIUrl":"10.1016/j.jimonfin.2025.103488","url":null,"abstract":"<div><div>Pointing to the prominent role of global shocks in determining financial outcomes, global credit aggregates and indicators of country-specific credit market stress co-move to a significant extent. In this work, we examine the transmission of global credit supply shocks associated with governments, businesses and households to the country level. In a data-rich environment, we show that a substantial amount of variation in credit aggregates and interest rates is explained by common global credit supply components. In addition, we find that real risk and term premia and their associated uncertainties (i.e., realized volatilities) transmit global shocks to country-level debt and equity markets. However, effect magnitudes and signs are heterogeneous across sectors, and highlight the relevance of sector-specific credit market monitoring. For instance, whereas global government credit supply eases financial pressures, acting as safe-haven lending, global household credit supply shocks significantly increase risk and liquidity premia across the globe. An investigation of monetary policy effects of major central banks (Fed, ECB, BoE, BoJ) on global credit supply reveals important transmission heterogeneities of conventional versus unconventional policies.</div></div>","PeriodicalId":48331,"journal":{"name":"Journal of International Money and Finance","volume":"161 ","pages":"Article 103488"},"PeriodicalIF":3.3,"publicationDate":"2025-11-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145694230","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-27DOI: 10.1016/j.jimonfin.2025.103487
Silvio Contessi , Qingyuan Du , Deting Gao , Lei Pan , Shenxiang Xie
This paper examines how exchange rate regime flexibility impacts the allocation of labor across firms. Specifically, we investigate how differences in labor-intensity or capital-intensity in production affect employment decisions under various degrees of exchange rate regime flexibility. In a simple theoretical model, we show that firms utilizing more labor-intensive production technologies are more likely to expand their employment when the exchange rate they face becomes less flexible. In contrast, firms employing more capital-intensive technology tend to hire more workers when the exchange rate is more flexible. We test our theory using granular firm-level data from China and provide robust evidence supporting the theoretical predictions.
{"title":"Exchange rate regime flexibility and firms’ employment","authors":"Silvio Contessi , Qingyuan Du , Deting Gao , Lei Pan , Shenxiang Xie","doi":"10.1016/j.jimonfin.2025.103487","DOIUrl":"10.1016/j.jimonfin.2025.103487","url":null,"abstract":"<div><div>This paper examines how exchange rate regime flexibility impacts the allocation of labor across firms. Specifically, we investigate how differences in labor-intensity or capital-intensity in production affect employment decisions under various degrees of exchange rate regime flexibility. In a simple theoretical model, we show that firms utilizing more labor-intensive production technologies are more likely to expand their employment when the exchange rate they face becomes less flexible. In contrast, firms employing more capital-intensive technology tend to hire more workers when the exchange rate is more flexible. We test our theory using granular firm-level data from China and provide robust evidence supporting the theoretical predictions.</div></div>","PeriodicalId":48331,"journal":{"name":"Journal of International Money and Finance","volume":"161 ","pages":"Article 103487"},"PeriodicalIF":3.3,"publicationDate":"2025-11-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145694232","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
扫码关注我们
求助内容：
应助结果提醒方式：
京公网安备 11010802042870号