Using forecast errors and intraday data, we show that positive Chinese industrial production surprises raise Asia-Pacific equities, global long-term yields, and China-demand-intensive commodities. Spillovers to global equity markets are stronger in countries with higher Chinese trade exposure. The results point to hedging premia and growth expectations as key drivers of comovement, underscoring China’s role in the Global Financial Cycle.

The project analyzes how countries recover from sovereign default, using a newly compiled dataset and a structural quantitative model. The findings highlight the central role of foreign reserve accumulation in restoring market access, reducing sovereign risk, and rebuilding policy credibility following default episodes.