The Capital Account and Pakistani Rupee Convertibility: Macroeconomic Policy Challenges

Capital regulation and macroeconomic activity: Implications for macroprudential policy

This paper studies the macroeconomic effect of changes in the capital requirements set by microprudential bank regulators. The central result is that unanticipated increases in capital requirements lower lending to firms and households, reduce aggregate expenditure and raise credit spreads. A financial accelerator effect is found to amplify the macroeconomic responses to shifts in bank credit s...

Robustness and Macroeconomic Policy

This paper considers the design of macroeconomic policies in the face of uncertainty. In recent years, several economists have advocated that when policymakers are uncertain about the environment they face and find it difficult to assign precise probabilities to the alternative scenarios that may characterize this environment, they should design policies to be robust in the sense that they mini...

Macroeconomic Policy and Performance

Assessing China’s recent capital outflows: policy challenges and implications

China has experienced a dramatic swing from net capital inflows to large net outflows in recent years. Using balance of payments data, an analysis of the underlying factors that drove China’s recent capital outflows since mid-2014 were (1) corporates adjusting their balance sheets to reduce foreign exchange exposure or to unwind “carry trade”; (2) Chinese corporate and households seeking to div...

The impact of industrial policy on capital structure with financial flexibility, macroeconomic conditions and economic growth and development taken into account: evidence from Taiwan

This paper examines the impact of industrial policy on capital structure based on a partial adjustment model of capital structure that incorporates financial flexibility, macroeconomic conditions, economic development as well as firm-level factors. The issue is investigated in the context of Taiwan where industrial policy is widely considered to have played a strategic role in its economic succ...