Japan reenters the foreign exchange market

From 1999 to 2004 Japan unilaterally sold a combined, and unprecedented, 500 billion dollars of yen.Foreign exchange market ; Japan

Capital controls by any other name

The embrace of ad hoc capital controls to address temporary market inefficiencies on a case-by-case basis, while pragmatic, perpetuates the view that each capital crisis is an isolated example of failed financial institutions.Capital market

Mexico's oportunidades program fails to make the grade in NYC

A program that pays poor, rural Mexican families to keep their children in school didn't translate well to New York City. The latter's version will end this summer.Education ; Mexico ; New York (N.Y.)

Why "fixing" China's currency is no quick fix

Even if China does revalue its currency, jobs aren’t likely to come flooding back to the United States. Much of what China exports to the U.S. originates in other Asian countries.Foreign exchange rates ; International finance ; China

Why health care matters and the current debt does not

All of the attention given to raising the debt ceiling this past summer might lead some to believe that spending by the federal government only recently became unsustainable. Hardly. We've been on this path a long time.Health care reform ; Debt

Monetary policy and asset prices

The housing market crisis is the latest reminder that asset prices can and do run wild at rates capable of negative effects on real economic activity. Not surprisingly, this has reinvigorated debate over whether central banks should respond to asset price bubbles.Monetary policy ; Asset pricing

Food prices and inflation in emerging markets

The experience of the past decade illustrates the sensitivity of inflation in emerging markets to rapidly rising food prices.Inflation (Finance) ; Food prices ; Emerging markets

Commodity price gains: speculation vs. fundamentals

Commodities of all sorts have risen in price over the past few years. Some say that the prices reflect a bubble, driven by low interest rates and excessive speculation. Others say the price gains can be fully explained by supply and demand.Inflation (Finance) ; Food prices

Unemployment and the role of monetary policy

On balance, the figure suggests that structural unemployment during economic downturns has increased since 1991.Monetary policy - United States ; Unemployment

Capital flows and Japanese asset volatility

Characterizing asset price volatility is an important goal for financial economists. The literature has shown that variables that proxy for the information arrival process can help explain and/or forecast volatility. Unfortunately, however, obtaining good measures of volume and/or order flow is expensive or difficult in decentralized markets such as foreign exchange. We investigate the extent that Japanese capital flows—which are released weekly—reflect information arrival that improves foreign exchange and equity volatility forecasts. We find that capital flows can help explain transitory shocks to GARCH volatility. Transactions by Japanese residents in foreign bond markets have the most explanatory power among capital flows and that power is much greater in the second subsample.Capital movements ; Foreign exchange ; Japan