Research

Many countries heavily rely on commodities for their production and exports, rendering them susceptible to fluctuations in global commodity prices. This paper investigates the impact of exogenous commodity price shocks on the domestic credit market, with a particular focus on credit allocation across firms. Using detailed credit registry data from Brazil and leveraging regional and bank-level variation in commodity exposure, we find that commodity price booms enhance domestic financial conditions, leading to an expansion in bank lending and improved credit conditions. This expansion is accompanied by considerable spillovers both across and within sectors, with significant improvement in credit conditions concentrated in the nontradable sector, and among smaller firms. We explore the potential channels driving these patterns and discuss broader macroeconomic implications.

Using detailed credit data and an empirical strategy based on the removal of Chapter 7 bankruptcy flags, we study the effects of credit access on internal migration and neighborhood choice. We document that increased credit access increases zip-code migration rates but has no positive effect on a person’s neighborhood quality. We interpret this result as consistent with a view that unconstrained movers equalize utility across space by their willingness to pay for housing, so constrained agents have no incentive to move to better-on-observable neighborhoods when their constraints are relaxed.

This paper examines how supply chain disruptions amplify the macroeconomic consequences of terms-of-trade shocks in open economies. We develop a parsimonious small-open-economy model in which supply chain bottlenecks reduce the efficiency of imported goods. Leveraging a novel, country-specific measure of supply chain pressures constructed from textual analysis, we find that periods of elevated strain magnify the adverse effects of terms-of-trade deteriorations. In such episodes, output declines are steeper, unemployment rises more sharply, real exchange rate depreciation is greater, and inflation accelerates relative to low-pressure periods. The empirical evidence closely aligns with the model’s predictions. Taken together, these results highlight the critical role of supply chain conditions in shaping the transmission of external shocks and suggest that conventional stabilization policies may be less effective when such disruptions are acute.

This paper examines how the international spillovers of U.S. interest rate shocks to the rest of the world depend on the state of the business cycle abroad. Using a panel of 32 countries over 20 years and a local projection approach that allows dynamic responses to depend on the state of the economy at the time the shock occurs, I demonstrate that the effects of U.S. interest rate shocks are highly asymmetric. A tightening in the U.S. interest rate leads to a deeper and protracted decline in output, investment, and consumption during periods of economic slack. By contrast, during expansions, the same shocks lead to significant increases in output, investment, and consumption. Analysis of financial variables suggests that these asymmetries reflect state-dependent investor behavior in financial market. These results are robust to different model specifications and alternative measures of U.S. interest rate shocks, and do not depend on any country-specific characteristics.