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SUMMARY:Dominant Currency Debt
DTSTART:20190305T120000
DTEND:20190305T130000
DTSTAMP:20260407T094052Z
UID:0307da48e9a4bcbd35b0eee40cc56897825f73762816328bd932cc3e
CATEGORIES:Conferences - Seminars
DESCRIPTION:Egemen EREN ( Bank for International Settlements (BIS) )\nWhy 
 is the dollar the dominant currency for debt contracts and what are its ma
 croeconomic implications? We develop an international general equilibrium 
 model where firms optimally choose the currency composition of their debt.
  We show that there always exists a dominant currency debt equilibrium\, i
 n which all firms borrow in a single dominant currency. It is the currency
  of the country that effectively pursues aggressive expansionary monetary 
 policy in global downturns\, lowering real debt burdens of firms. We show 
 that the dollar empirically fits this description\, despite its short term
  safe haven properties. We provide further modern and historical empirical
  support for our mechanism across time and currencies. We use our model to
  study how the optimal monetary policy differs if the Federal Reserve reac
 ts to global versus domestic conditions.
LOCATION:UNIL\, Extranef\, room 126 https://planete.unil.ch/plan/?local=EX
 T-126
STATUS:CONFIRMED
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