Andrew Kenan Rose

National University of Singapore | NUS · NUS Business School

What does the macroeconomy look like in the aftermath of tariff changes? This study estimates impulse response functions from local projections using a panel of annual data that spans 151 countries from 1963 to 2014. Tariff increases are associated with persistent, economically and statistically significant declines in domestic output and productiv...

I investigate whether countries that use unconventional monetary policy (UMP) experience export booms. I use a popular gravity model of trade which requires neither the exogeneity of UMP, nor instrumental variables for UMP. In practice, countries that engage in UMP experience a drop in exports vis‐à‐vis countries that are not engaged in such polici...

The empirical evidence on the growth effects of import tariffs is sparse in the literature, notwithstanding strong views held by the public and politicians. Using an annual panel of macroeconomic data for 151 countries over 1963-2014, we find that tariff increases are associated with an economically and statistically sizeable and persistent decline...

We explore the impact of negative policy rates on banks using data on 5200 banks from 27 advanced European and Asian countries, 2010–2017. Our cross-country panel specification allows us to condition on global shocks and bank-specific fixed effects. Banks offset interest income losses under negative rates with lower deposit expenses and gains in no...

This study estimates the effect of data sharing on the citations of academic articles, using journal policies as a natural experiment. We begin by examining 17 high-impact journals that have adopted the requirement that data from published articles be publicly posted. We match these 17 journals to 13 journals without policy changes and find that em...

We study political influences on private banks receiving government funds. Using spatial discontinuities associated with congressional district borders, we show that recipient banks of the 2008 Troubled Asset Relief Program (TARP) program increased mortgage and small business lending by 23–60% more in census tracts located just inside their home-re...

This paper seeks to help establish a stylized fact: a country’s exports rise when its leadership is approved by other countries. I show this using a standard gravity model of bilateral exports, a panel of data from 2006 through 2017, and an annual Gallup survey that asks people in up to 157 countries whether they approve of the job performance of t...

We quantify the importance of a Global Financial Cycle (GFCy) for capital flows. We use capital flow data disaggregated by direction and type between 1990Q1 and 2015Q4 for 85 countries, and conventional techniques, models and metrics. Since the GFCy is unobservable, we use two methods to represent it: directly observable variables in center economi...

This paper examines exchange rate behaviour during the recent period with negative nominal interest rates. We use a daily panel of data of 61 currencies from January 2010 to May 2016; during this time five economies (Denmark, EMU, Japan, Sweden and Switzerland) experienced negative nominal interest rates. We examine both effective exchange rates an...

Larger data sets, with more countries and a longer span of time, exhibit systematically larger effects of European monetary union on trade. I establish this stylized fact with meta-analysis and confirm it by estimating a plain-vanilla gravity model. I then explain this finding by examining systematic biases in “multilateral resistance to trade” man...

Using data from British and American banks, we provide empirical evidence that government intervention affects the global activities of individual banks along three dimensions: depth, breadth and persistence. We examine depth by studying whether a bank's preference for domestic, as opposed to external, lending (funding) changes when it is subjected...

In our European Economic Review (2002) paper, we used pre-1998 data on countries participating in and leaving currency unions to estimate the effect of currency unions on trade using (then-) conventional gravity models. In this paper, we use a variety of empirical gravity models to estimate the currency union effect on trade and exports, using rece...

Using data from British and American banks, we provide empirical evidence that government intervention affects the global activities of individual banks along three dimensions: depth, breadth and persistence. We examine depth by studying whether a bank's preference for domestic, as opposed to external, lending (funding) changes when it is subjected...

In this paper, I quantify a gain that a country receives when its global influence is considered to be admirable by others. I use a standard gravity model of bilateral exports, a panel of data from 2006 through 2013, and an annual survey conducted for the BBC by GlobeScan which asks people in up to 46 countries about whether each of up to 17 countr...

This paper explores the relationship between inflation and the existence of a local, nominal, publicly traded, longmaturity, domestic currency bond market. Domestic bond markets have an unclear effect on inflation; they present issuing governments with the opportunity to inflate away their debt obligations, but they also expose bondholders to capit...

Governments have rarely imposed or removed capital controls in response to short-term fluctuations in output, the terms of trade, or financial-stability considerations. We show empirically that controls on the international flow of financial capital are highly durable, often remaining in place for decades; their duration is striking compared with r...

We examine large public interventions in the financial sector, such as bank nationalizations, and search for “financial protectionism,” a decrease in the quantity and/or an increase in the price of loans that banks from one country make to borrowers resident in another. We use a bank-level panel data set spanning all UK-resident banks between 1997Q...

In contrast to earlier recessions, the monetary regimes of many small economies have not changed in the aftermath of the global financial crisis. This is due in part to the fact that many small economies continue to use hard exchange rate fixes, a reasonably durable regime. However, most of the new stability is due to countries that float with an i...

Conventional wisdom holds that protectionism is counter-cyclic; tariffs, quotas and the like grow during recessions. While that may have been a valid description of the data before the First World War, it is now inaccurate. Since the Second World War, protectionism has not been counter-cyclic; tariffs and non-tariff barriers simply do not rise syst...

During the 2007-09 financial crisis, the banking sector received an extraordinary level of public support. In this empirical paper, we examine the determinants of a number of public sector interventions: government funding or central bank liquidity insurance schemes, public capital injections, and nationalisations. We use bank-level data spanning a...

We derive an international centralized and decentralized market model, in the spirit of Lagos and Wright (2005), where agents can experience asset-specific illiquidity. We apply the analysis to the question of dollar illiquidity during the global financial crisis and the response through international swap arrangements conducted by the Federal Rese...

Conventional wisdom holds that protectionism is counter-cyclic; tariffs, quotas and the like grow during recessions. While that may have been a valid description of the data before the Second World War, it is now inaccurate. In the post-war era, protectionism has not actually moved counter-cyclically. Tariffs and non-tariff barriers simply do not r...

Conventional wisdom holds that protectionism is counter-cyclic; tariffs, quotas and the like grow during recessions. While that may have been a valid description of the data before the Second World War, it is no longer accurate. In the post-war era, protectionism has not actually moved counter-cyclically. Tariffs and non-tariff barriers do not syst...

While the global financial crisis was centered in the United States, it led to a surprising appreciation in the dollar, suggesting global dollar illiquidity. In response, the Federal Reserve partnered with other central banks to inject dollars into the international financial system. Empirical studies of the success of these efforts have yielded mi...

This paper analyzes the causes of the 2008-2009 global financial crisis together with its manifestations, using a Multiple Indicator Multiple Cause (MIMIC) model. The analysis is conducted on a cross-section of 85 countries. It is found that more financially integrated countries do not seem to have suffered more during the most serious macroeconomi...

The Doha multilateral round of trade negotiations sponsored by the WTO has been dragging on for over a decade, with no end in sight. In this short paper we assess empirically what determines the duration of trade negotiations, focusing on the span between the start of trade talks and their conclusion. We use data from 88 regional trade agreements b...

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The effects of Regional Trade Agreements (RTAs) are disputed. In this paper, we assess these effects using capital market data and an event-study approach, using a daily data set covering a thousand announcements spanning over eighty economies and a hundred RTAs over twenty recent years. We measure the effects of news concerning RTAs on the returns...

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We look at the exchange rate policy choices and outcomes for small rich economies. Small rich economies face significant policy challenges due to proportionately greater economic volatility than larger economies. These economies usually choose some form of fixed exchange rate regime, particularly in the very small economies where the per capita cos...

We provide the first empirical tests for financial protectionism, defined as a nationalistic change in banks’ lending behaviour, as the result of public intervention, which leads domestic banks either to lend less or at higher interest rates to foreigners. We use a bank-level panel data set spanning all British and foreign banks providing loans wit...

This empirical paper is concerned with the determination of business cycle synchronization. I focus in particular on the role of monetary regimes. Inflation targeting seems to have a small but positive effect on the synchronization of business cycles; countries that target inflation seem to have cycles that move more closely with foreign cycles. Mo...

The reform in Asian financial sectors—especially in banking and stock markets—has been remarkable since the currency crisis of 1997–98. East Asia is now a major player in international finance, providing serious competition to the more traditional financial centers of London and New York. Financial Sector Development in the Pacific Rim provid...

This paper provides a selective survey of the incidence, causes, and consequences of a country's choice of its exchange rate regime. I begin with a critical review of Michael Klein and Jay C. Shambaugh's (2010) book Exchange Rate Regimes in the Modern Era, and then proceed to provide an alternative overview of what the economics profession knows an...

We model the causes of the 2008 financial crisis together with its manifestations, using a cross-country multiple indicator multiple cause model. We consider both national and, critically, international linkages between countries and potential crisis 'epicentres', including the United States. A country holding an epicentre's securities is exposed t...

Inflation targeting seems to have a small but positive effect on the synchronization of business cycles; countries that target inflation seem to have cycles that move slightly more closely with foreign cycles. Thus the advent of inflation targeting does not explain the decoupling of global business cycles, for two reasons. Indeed business cycles ha...

China's announcement on Saturday, June 19 th that it will abandon its currency peg to the dollar and henceforth manage the renminbi more flexibly against a basket of currencies will have implications for the world economy, but most of all it will have implications for China. Assume for sake of argument that Beijing now allows the renminbi to apprec...

Around four years ago I began to work on the effects of the World Trade Organization (WTO) and its predecessor the General Agreement on Tariffs and Trade (GATT).1 I was interested in quantifying the effects of membership in these multilateral trade organizations on international trade. I fully expected to find a large positive effect and was primar...

Recent studies show that almost all industrial countries have experienced dramatic decreases in both fertility and mortality rates. This situation has led to aging societies with economies that suffer from both a decline in the working population and a rise in fiscal deficits linked to increased government spending. East Asia exemplifies these tren...

We update Rose and Spiegel (2009a, b) and search for simple quantitative models of macroeconomic and financial indicators of the "Great Recession" of 2008-09. We use a cross-country approach and examine a number of potential causes that have been found to be successful indicators of crisis intensity by other scholars. We check a number of different...

How does the management and resolution of the current crisis compare with the response of the Nordic countries in the early 1990s, widely regarded as exemplary? We argue that, while intervention has been prompter, the measures taken so far remain less comprehensive and in-depth. In particular, the cleansing of balance sheets has proceeded more slow...

Economists are skeptical about the economic benefits of hosting "mega-events" such as the Olympic Games or the World Cup, since such activities have considerable cost and seem to yield few tangible benefits. These doubts are rarely shared by policy-makers and the population, who are typically quite enthusiastic about such spectacles. In this paper,...

We examine the role of noneconomic partnerships in promoting international economic exchange. Since far-sighted countries are more willing to join costly international partnerships such as environmental treaties, environmental engagement tends to encourage international lending. Countries with such noneconomic partnerships also find it easier to en...

Managing fiscal policy—the revenues and spending of an individual nation—is among the most challenging tasks facing governments. Wealthy countries are constrained by complex regulation and taxation policies, while developing nations often face high inflation and trade taxes. In this volume, esteemed economists Takatoshi Ito and Andrew K. Rose,...

Prices of most agricultural and mineral commodities rose strongly in the past decade, peaking sharply in 2008. Popular explanations included strong global growth (especially from China and India), easy monetary policy (as reflected in low real interest rates or expected inflation), a speculative bubble (resulting from bandwagon expectations) and ri...

The enormity of the current financial collapse raises the question whether the crisis could have been predicted. This is the second of two Economic Letters on the topic. This Letter examines research suggesting that early warning models would not have accurately predicted the relative severity of the current crisis across countries, casting doubt o...

We compare the duration and performance of different monetary regimes, especially the contrast between countries those that fix exchange rates and those that target inflation. Inflation targeting is a more durable policy; no country has yet been forced to abandon an inflation target, while many have abandoned fixed exchange rates. Indeed, even thou...

We compare the duration and performance of different monetary regimes, especially the contrast between countries those that fix exchange rates and those that target inflation. Inflation targeting is a more durable policy; no country has yet been forced to abandon an inflation target, while many have abandoned fixed exchange rates. Indeed, even thou...

This paper applies the Meese-Rogoff (1983a) methodology to the stock market. We compare the out-of-sample forecasting accuracy of various time-series and fundamentals-based models of aggregate stock prices. We stick as close as possible to the original Meese-Rogoff sample and methodology. Just as Meese and Rogoff found for the case of exchange rate...

Large sporting events, such as the Olympic Games, usually end up imposing large costs on their hosts that are not nearly compensated by either the revenues earned during the event or the legacy of large facilities that are left behind. The implausibility of recovering such a sizable investment explains why economists are usually skeptical that host...

This short paper reviews the recent literature linking monetary union, international trade, and business cycle synchronization. I survey the literature using the quantitative technique of meta- analysis, which allows me to estimate the effects of EMU taking into account the entire extant literature. Twenty-six recent studies have investigated the e...

This article reviews currency unions, that is, groups of countries that use a common money. There are a large number of such monetary unions in both the industrial and the developing worlds. I review both the theoretical reasons why countries choose to belong to currency unions and the empirical performance of these unions.

The imbalanced, yet mutually beneficial, trading relationship between the United States and Asia has long been one of international finance’s most perplexing mysteries. Although the United States continues to post a substantial trade deficit—and China reaps the benefits of a surplus—the dollar has yet to sink in the face of ever-increasing ac...

Abstract We use a quinquennial data set covering 87 countries between 1975 and 2005 to investigate empirically the relationship between fertility and the real effective exchange rate. Theoretically, a country experiencing a decline in its fertility rate can be expected to experience a real depreciation. We test and confirm this hypothesis, controll...

Leading American and European economists discuss monetary and fiscal policy from an international macroeconomic perspective in a companion volume to the NBER Macroeconomics Annual: cutting-edge research on macroeconomic issues and topical questions concerning the eastward expansion of the European Monetary Union. The NBER International Seminar on M...

This paper studies the characteristics of departures from monetary unions. During the post-war period, almost seventy distinct countries or territories have left a currency union, while over sixty have remained continuously in currency unions. I compare countries leaving currency unions with those remaining within them, and find that leavers tend t...

Tomz, Goldstein, and Rivers (hereafter "TGR") argue that the General Agreement on Tariffs and Trade and its successor the World Trade Organization (hereafter "GATT") had a substantial positive effect on trade. Their paper is a critique of my article "Do We Really Know that the WTO Increases Trade?" which appeared in this Review, 2004. Among other t...

This paper shows that proximity to major international financial centers seems to reduce business cycle volatility. In particular, we show that countries that are farther from major locations of international financial activity systematically experience more volatile growth rates in both output and consumption, even after accounting for political i...

A stable international monetary system has emerged since the early 1990s. A large number of industrial and a growing number of developing countries now have domestic inflation targets administered by independent and transparent central banks. These countries place few restrictions on capital mobility and allow their exchange rates to float. The dom...

We study empirically the macroeconomic effects of an explicit "de jure" quantitative goal for monetary policy. Quantitative goals take three forms: exchange rates, money growth rates, and inflation targets. We analyze the effects on inflation of both having a quantitative target and hitting a declared target. Our empirical work uses an annual data...

The practice of trading across international borders has undergone a series of changes with great consequences for the world trading community, the result of new trade agreements, a number of financial crises, the emergence of the World Trade Organization, and countless other less obvious developments. In International Trade in East Asia, a group o...

This article analyses the causes and consequences of offshore financial centres (OFCs). While OFCs are likely to encourage bad behaviour in source countries, they may also have unintended positive consequences, such as providing competition for the domestic banking sector. We derive and simulate a model of a home country monopoly bank facing a repr...

I search for a %u201Cscale%u201D effect in countries. I use a panel data set that includes 200 countries over forty years and link the population of a country to a host of economic and social phenomena. Using both graphical and statistical techniques, I search for an impact of size on the level of income, inflation, material well-being, health, edu...

Is it better to live in a big country than a small one? In this paper, I examine whether economic and social conditions vary systematically with the population of a country. Economics provides a number of theoretical reasons why country size should matter, for instance, because of increasing returns to scale or because it is easier to provide publi...

This paper reviews the recent literature that quantitatively assesses the effect on international trade of membership in the World Trade Organization (WTO) and its predecessor, the General Agreement on Tariffs and Trade (GATT). In my 2004a paper, I show that a straightforward look at the data does not find a strong effect of GATT/WTO membership on...