ABSTRACT I show that monetary policy divergence vis-a-vis the US has larger spillover
effects in emerging markets than advanced economies. The monetary policy of the US …

We explore the interplay between trade-invoicing patterns and the pricing of safe assets in
different currencies. Our theory highlights the following points:(i) a currency's role as a unit of …

The real exchange rate (RER) measures relative price levels across countries, capturing
deviations from purchasing power parity (PPP). RER is a key variable in international …

The trend in the world real interest rate for safe and liquid assets fluctuated close to 2% for
more than a century, but has dropped significantly over the past three decades. This decline …

We provide a theory of the determination of exchange rates based on capital flows in
imperfect financial markets. Capital flows drive exchange rates by altering the balance …

We propose a dynamic general equilibrium model of exchange rate determination that
accounts for all major exchange rate puzzles, including Meese-Rogoff, Backus-Smith …

The uncovered interest parity puzzle concerns the empirical regularity that high interest rate
countries tend to have high expected returns on short term deposits. A separate puzzle is …

From the field's leading authority, the most authoritative and comprehensive advanced-level
textbook on asset pricing In Financial Decisions and Markets, John Campbell, one of the …

The US dollar's dominance seems under threat. The near collapse of the US financial
system in 2008–2009, political paralysis that has blocked effective policymaking, and …

The covered interest rate parity (CIP) condition is a fundamental arbitrage relationship in
international finance. In this chapter, we review its breakdown during the Global Financial …