Abstract Using a unique dataset that links the production and sales activities of Chinese exporting firms, we document a systematic wedge between the value of goods firms produce for export and the value of goods they sell in foreign markets. We show that this pattern reflects the presence of exporters that also operate as trade intermediaries, which we term producer intermediaries. We further document that firms with greater accumulated marketing expenditures are more likely to become producer intermediaries. Motivated by these facts, we develop a theoretical framework in which firms can lend and borrow customer capital through outsourcing relationships. In this environment, firms with high foreign customer capital can facilitate trade by channeling export demand to more productive firms with limited customer capital, even when frictions impede efficient outsourcing. Estimating the model, we find that the gains from outsourcing are substantial and that producer intermediaries account for a large share of these gains.
Abstract Using monthly U.S. data, I estimate a structural vector autoregression with short- and long-run restrictions to compare the effects of monetary base shocks before and after the introduction of interest on reserves (IOR) in October 2008. The subsamples cover January 1967–October 2008 and November 2008–October 2018. Before IOR, a one-standard-deviation shock raises output by approximately 0.31% at its peak and the price level permanently by approximately 0.29%. The 68% error band for output is above zero for 57 of 60 months. After IOR, both responses are muted and statistically imprecise. Monetary policy shocks account for 86.5% of monetary base variation on impact before IOR and 51.1% afterward, with money demand shocks accounting for the difference. These findings are consistent with weaker aggregate transmission of monetary base expansions to the real economy.
Abstract In this paper, we provide a general framework for dynamic macroeconomic models that incorporate history and context dependencies. Such features arise in several strands in the economic literature including habit formation based on consumption or other economic variables, decision theory, health economics, sports economics, environmental economics, and law and economics. Our approach introduces a memory function to account for how history is formed. This allows us to encompass a wide range of standard economic models while adapting to emerging modelings such as circular economy models. We establish the corresponding optimization results and develop dynamic programming tools so that the standard machinery can still be applied directly despite the specific difficulties induced by history-dependence.
Abstract This paper studies whether climate-related adjustments to the Basel III output floor can reconcile prudential discipline with environmental objectives. We develop an environmental general equilibrium framework with endogenous default risk and regulatory risk weights to compare a standard output floor with alternative climate-oriented designs. We show that while the standard output floor stabilizes banks’ capital adequacy and Risk-Weighted Assets (RWA) density over the cycle, it delivers no significant environmental benefits. Climate-oriented output floors deliver only limited environmental improvements and introduce a trade-off with prudential discipline when the green floor is deactivated, highlighting the difficulty of jointly achieving prudential and environmental objectives through capital regulation.
