This paper presents an approach to dynamic factor modeling in which variations can be idiosyncratic, block-specific, or common across blocks and units. Existing two level factor models do not usually account for variations at the block level which implies that these can be confounded with genuine common co-movements in the data. Specifying the block structure also facilitates interpretation of ...

Abstract We present a comprehensive analysis of the shock absorption role external positions using currency exposures dataset by Bénétrix et al. (2020). While literature has frequently studied how net international investment position and its composition determine direction scale valuation effects, we focus on their amplitude. This is central importance for global financial stability given larg...

This paper analyzes how major external shocks and policy reforms affect Bolivia’s ability to achieve pro-poor growth. Employing a recursive-dynamic CGE model, it considers three different scenarios: an optimistic baseline scenario that roughly extrapolates the situation prevailing before the onset of the recent economic crisis; a more realistic scenario that accounts for two important negative ...

Abstract This paper contributes to a fuller understanding of macroeconomic outcomes financial market disturbances and the central bank’s role in stability. Our two major contributions are conceptual econometric. Conceptually, we introduce phases business cycle econometrically employ Bayesian VARs. We document that shock increases credit non-financial sector leads persistent decline economic act...

Many researchers of different fields are interested in building resilient systems that can absorb shocks and recover from damages caused by unexpected large-scale events; however, no common agreement on the definition of resilience exists. In this paper, we set out to establish a new challenging research discipline that we call “systems resilience”, which provides a set of unified design princi...