Speaker:Assistant Professor Zhang Mengbo (Shanghai University of Finance and Economics)

Host:Assistant Professor Yang Cheng (Li Anmin Institute of Economics, Liaoning University)

Guest introduction:Associate Professor He Chao (China Institute of Economic, Liaoning University)

Time:May 31, 2024 (Friday) 10:00-11:30 (Beijing time)

Location:Conference Room, 1st Floor, Wuzhou Park, Chongshan Campus, Liaoning University

Online Venue:Tencent Meeting:721-561-645

Language:Chinese/English

Abstract：

This paper highlights the prominent role of financially constrained intermediaries, especially currency dealers, in the international transmission of US (un)conventional monetary policy. We develop a two-country New Keynesian model with financially constrained local banks and global currency dealers, wherein currency dealers intermediate liquidity imbalances resulting from banks' portfolio rebalancing. We discipline the model by targeting estimates from a structural vector autoregression. Our quantitative analysis indicates that currency dealers' constraint is crucial for the transmission and effectiveness of quantitative easing in an open economy. Our model also rationalizes the major exchange rate puzzles, especially the downward term structure of currency carry trade risk premia.

Introduction to the speaker:

Zhang Mengbo is an assistant professor at the School of Finance, Shanghai University of Finance and Economics. He received his PhD in Economics from UCLA in 2021 and joined the School of Finance at Shanghai University of Finance and Economics in the same year. His research mainly focuses on macrofinance, monetary policy, commercial banking, etc. His research has been published in journals such as the Journal of Money,Credit and Banking.