Joint Macroeconomic Seminar - Cristina Arellano (Federal Reserve Bank of Minneapolis, University of Minnesota, NBER)

You are kindly invited to attend an online Joint Macroeconomic Seminar co-organised by the National Bank of Belgium and the Belgian universities (KU Leuven, UAntwerpen, UCLouvain, UGent, ULB, ULiège, UNamur and VUB). 

by Cristina Arellano (Federal Reserve Bank of Minneapolis, University of Minnesota, NBER) on Deadly Debt Crise: COVID-19 in Emerging Markets (co-authored with Yan Bai and Gabriel Mihalache) 

Abstract 
The COVID-19 epidemic in emerging markets risks a combined health, economic, and debt crisis. We integrate a standard epidemiology model into a sovereign default model and study how default risk impacts the ability of these countries to respond to the epidemic. Lockdown policies are useful for alleviating the health crisis but they carry large economic costs and can generate costly and prolonged debt crises. The possibility of lockdown induced debt crises in turn results in less aggressive lockdowns and a more severe health crisis. We find that the social value of debt relief can be substantial because it can prevent the debt crisis and can save lives. 

The webinar will take place on Thursday, February 25th, 2021 from 16:30 until 18:00 via a Microsoft Teams meeting. 

Please reply by email to nbbmacro.seminar@nbb.be if you wish to participate to this webinar or if you want to have an appointment with the speaker. 

After registration you will receive a confirmation email with the link to join the webinar.Kind regards, Peter Claeys (VUB), Pierrick Clerc (ULiège), Ferre De Graeve (KU Leuven), Romain Houssa (UNamur), Robert Kollmann (ULB), Yasin Kursat Önder (UGent), Luca Pensieroso (UCLouvain), Roland Winkler (UAntwerpen) and Raf Wouters (NBB)

Joint Macroeconomic Seminar - Ricardo Caballero (Massachusetts Institute of Technology (MIT) Economics)

You are kindly invited to attend an online Joint Macroeconomic Seminar co-organised by the National Bank of Belgium and the Belgian universities (KU Leuven, UAntwerpen, UCLouvain, UGent, ULB, ULiège, UNamur and VUB) by Ricardo Caballero (Massachusetts Institute of Technology (MIT) Economics) on Monetary Policy with Opinionated Markets (co-authored with Alp Simsek)

Abstract 

Central banks (the Fed) and markets (the market) often disagree about the path of interest rates. We develop a model where these different views stem from disagreements between the Fed and the market about future aggregate demand. We then study the implications of these disagreements for monetary policy, the term structure of interest rates, and economic activity. In our model, agents learn from the data but not from each other — they are opinionated. In this context, the market perceives monetary policy “mistakes” and the Fed partially accommodates the market’s view to mitigate the impact of perceived “mistakes” on output and inflation. The Fed plans to implement its own view gradually, as it expects the market to receive more information and move closer to the Fed’s belief. Disagreements about future demand translate into disagreements about future interest rates. Disagreements also provide a microfoundation for monetary policy shocks: after a surprise policy announcement, the market (partially) learns the Fed’s belief and the extent of future “mistaken” interest rate changes. We categorize these shocks into three groups: Fed belief shocks, market reaction shocks, and tantrum shocks, and analyze their impact on forward interest rates and economic activity. Tantrum shocks are the most damaging, as they arise when the Fed fails to forecast the forward rates’ reaction. These shocks motivate gradualism and communication policies that reveal the Fed’s belief, not to persuade the market (which is opinionated) but to prevent the market from misinterpreting the Fed’s belief. Finally, we also find that disagreements affect inflation and create a policy trade-off between output and inflation stabilization. 

The webinar will take place on Thursday, February 11th, 2021 from 16:30 until 18:00 via a Microsoft Teams meeting. 

Please reply by email to nbbmacro.seminar@nbb.be if you wish to participate to this webinar or if you want to have an appointment with the speaker. After registration you will receive a confirmation email with the link to join the webinar. 

Kind regards, Peter Claeys (VUB), Pierrick Clerc (ULiège), Ferre De Graeve (KU Leuven), Romain Houssa (UNamur), Robert Kollmann (ULB), Yasin Kursat Önder (UGent), Luca Pensieroso (UCLouvain), Roland Winkler (UAntwerpen) and Raf Wouters (NBB)

Joint Macroeconomic Seminar - Lawrence J. Christiano (Northwestern University)

You are kindly invited to attend an online Joint Macroeconomic Seminar co-organised by the National Bank ofBelgium and the Belgian universities (KU Leuven, UAntwerpen, UCLouvain, UGent, ULB, ULiège, UNamurand VUB). 

by Lawrence J. Christiano (Northwestern University) on Financial Dollarization in Emerging Markets: Efficient Risk Sharing or Prescription forDisaster? (co-authored with Husnu C. Dalgic and Armen Nurbekyan) 

Abstract
There is a common view that financial dollarization is a source of financial fragility for emerging marketcountries. Although we identify sources of fragility in some aspects of dollarization, the common view that financial dollarization is a source fragility is over stated. We find that deposit dollarization (and the currency mismatch that implies for non-financial firms) is not a source of fragility and may even be part of a welfareraising insurance arrangement among different households within emerging markets. Our insurance view about financial dollarization and the lack of risks to financial stability emerges from a study of a large crosscountry dataset. We develop a simple model which formalizes the insurance view, which is consistent with the key cross-country facts on interest rate differentials, deposit dollarization and exchange rate depreciations in recessions that we find in our dataset. 

The webinar will take place on Thursday, January 21st, 2021 from 16:30 until 18:00 via a Microsoft Teams meeting.

Please reply by email to nbbmacro.seminar@nbb.be if you wish to participate to this webinar or if you want to have an appointment with the speaker. After registration you will receive a confirmation email with the link to join the webinar. 


Kind regards, 

Peter Claeys (VUB), Pierrick Clerc (ULiège), Ferre De Graeve (KU Leuven), Romain Houssa (UNamur),Robert Kollmann (ULB), Yasin Kursat Önder (UGent), Luca Pensieroso (UCLouvain),Roland Winkler (UAntwerpen) and Raf Wouters (NBB)

Online Joint Macroeconomic Seminar -Javier Bianchi (Federal Reserve Bank of Minneapolis)

You are kindly invited to attend an online Joint Macroeconomic Seminar co-organised by the National Bank of Belgium and the Belgian universities (KU Leuven, UAntwerpen, UCL, UGent, ULB, UNamur and VUB). by  Javier Bianchi (Federal Reserve Bank of Minneapolis) on  Bank-Runs, Contagion and Credit Easing (co-authored with Manuel Amador) 

Abstract
We present a macroeconomic model of financial crises in which banks are subject to self-fulfilling runs. An individual bank is vulnerable to a run when a loss of investors’ confidence triggers deposit withdrawals and leads the bank to default on its obligations. We characterize how this vulnerability depends on its own leverage as well as macroeconomic fundamentals. We show that bank-runs can be contagious and spread out across the entire financial system. A key policy insight is that the effectiveness of credit easing depends critically on whether a financial crisis is driven by fundamentals or loss of confidence. 

The webinar will take place on Thursday, November 19th, 2020 from 16:30 until 18:00 via a Microsoft Teams meeting

Please reply by email to nbbmacro.seminar@nbb.be if you wish to participate to this webinar or if you want to have an appointment with the speaker. After registration you will receive a confirmation email with the link to join the webinar.  

Kind regards, Peter Claeys (VUB), Ferre De Graeve (KU Leuven), Romain Houssa (UNamur), Robert Kollmann (ULB), Yasin Kursat Önder (UGent), Luca Pensieroso (UCL), Roland Winkler (UAntwerpen) and Raf Wouters (NBB) 

Joint Macroeconomic Seminar - Hanno Lustig (Stanford Graduate School of Business, NBER and SIEPR) on The U.S. Public Debt Valuation Puzzle

You are kindly invited to attend an online Joint Macroeconomic Seminar co-organised by the National Bank of Belgium and the Belgian universities (KU Leuven, UAntwerpen, UCL, UGent, ULB, UNamur and VUB). 
by  Hanno Lustig (Stanford Graduate School of Business, NBER and SIEPR)  on  The U.S. Public Debt Valuation Puzzle (co-authored with Zhengyang Jiang, Stijn Van Nieuwerburgh and Mindy Z. Xiaolan) 


Abstract
The government budget constraint ties the market value of government debt to the expected present discounted value of fiscal surpluses. Bond investors fail to impose this no-arbitrage restriction in the U.S., resulting in a government debt valuation puzzle. Both cyclical and long-run dynamics of tax revenues and government spending make the surplus claim risky. Under a realistic asset pricing model, this risk in surpluses creates a wedge of 299 % of GDP between the value of debt and that the surplus claim, and implies an expected return on the debt portfolio that far exceeds the observed yield on Treasuries. 
The webinar will take place on Thursday, October 29th, 2020 from 16:30 until 18:00 via a Microsoft Teams meeting

Please reply by email to nbbmacro.seminar@nbb.be if you wish to participate to this webinar or if you want to have an appointment with the speaker. After registration you will receive a confirmation email with the link to join the webinar.  

Kind regards, Peter Claeys (VUB), Ferre De Graeve (KU Leuven), Romain Houssa (UNamur), Robert Kollmann (ULB), Yasin Kursat Önder (UGent), Luca Pensieroso (UCL), Roland Winkler (UAntwerpen) and Raf Wouters (NBB) 

First online Joint Macroeconomic Seminar - Giancarlo Corsetti (Cambridge University and CEPR)

You are kindly invited to attend the first online Joint Macroeconomic Seminar co-organised by the National Bank of Belgium and the Belgian universities (KU Leuven, UAntwerpen, UCL, UGent, ULB, UNamur and VUB). 
 
by  
Giancarlo Corsetti (Cambridge University and CEPR) 
 
on  
Exchange Rate Misalignment and External Imbalances: What is the Optimal Monetary Policy Response? (co-authored with Luca Dedola and Sylvain Leduc) 


Abstract

How should monetary policy respond to capital inflows that appreciate the currency, widen the current account deficit and cause domestic overheating? Using the workhorse open-macro monetary model, we derive a quadratic approximation of the utility-based global loss function in incomplete market economies, solve for the optimal targeting rules under cooperation and characterize the constrained-optimal allocation. The answer is sharp: the optimal monetary stance is contractionary if nominal rigidities reduce the exchange rate pass-through (ERPT) on import prices, expansionary if ERPT is complete. Under the optimal policy, misalignment and exchange rate volatility are higher in economies where incomplete pass through contains the effects of exchange rates on price competitiveness. 
The webinar will take place on Thursday, October 15th, 2020 from 16:30 until 18:00 via a Microsoft Teams meeting. 

Please reply by email to nbbmacro.seminar@nbb.be if you wish to participate to this webinar or if you want to have an appointment with the speaker. After registration you will receive a confirmation email with the link to join the webinar. 
 
Kind regards, Peter Claeys (VUB), Ferre De Graeve (KU Leuven), Romain Houssa (UNamur), Robert Kollmann (ULB), Yasin Kursat Onder (UGent), Luca Pensieroso (UCL), Roland Winkler (UAntwerpen) and Raf Wouters (NBB)