{"title":"Systemic risk in global FX markets: Measurement and determinants","authors":"Yanting Jiang , Juan Lin , Yanghan Chen","doi":"10.1016/j.jimonfin.2025.103435","DOIUrl":"10.1016/j.jimonfin.2025.103435","url":null,"abstract":"<div><div>This paper examines systemic risk in global foreign exchange (FX) markets using a dynamic skew-<span><math><mi>t</mi></math></span> factor copula model for 36 currencies from 2015 to 2024. We document significant time variation in systemic risk with pronounced spikes during major global disruptions. Exchange rate regimes significantly influence currency vulnerability, with floating and intermediate regimes providing better insulation against systemic risk than fixed regimes. We identify an inverted U-shaped relationship between global economic integration and currency vulnerability: initial trade and FDI integration increases vulnerability until reaching critical thresholds, beyond which deeper integration reduces vulnerability. These findings have important implications for systemic risk management in increasingly interconnected FX markets.</div></div>","PeriodicalId":48331,"journal":{"name":"Journal of International Money and Finance","volume":"159 ","pages":"Article 103435"},"PeriodicalIF":3.3,"publicationDate":"2025-09-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145158268","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Real exchange rate, financial constraints and product innovation: Evidence from China","authors":"Liang Fu , Chun-Yu Ho , Xiao Wei , Xiaoli Zhang","doi":"10.1016/j.jimonfin.2025.103437","DOIUrl":"10.1016/j.jimonfin.2025.103437","url":null,"abstract":"<div><div>This paper examines how real exchange rate (RER) movements affects product innovation using a panel dataset of Chinese manufacturing firms. We construct a firm-specific effective RER to reflect each firm’s unique exposure to exchange rate shocks based on its composition of trading partners. Product innovation is measured by the share of new product sales in total sales (NPS), an indicator that reflects the successful commercialization of product innovation. Our main results report that RER appreciation reduces NPS. We further hypothesize that decreased profits from diminished exports, induced by RER appreciation, tighten financial constraints on developing new products. Empirical evidence supports this hypothesis: the negative effect of RER appreciation on NPS is more pronounced for financially constrained firms, specifically those with private ownerships, less fixed assets, a lower current ratio, a lower net liquidity ratio, or those located in cities with lower levels of financial development.</div></div>","PeriodicalId":48331,"journal":{"name":"Journal of International Money and Finance","volume":"159 ","pages":"Article 103437"},"PeriodicalIF":3.3,"publicationDate":"2025-09-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145158267","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Foreign monetary policy and domestic inflation in emerging markets","authors":"Marco Flaccadoro, Valerio Nispi Landi","doi":"10.1016/j.jimonfin.2025.103434","DOIUrl":"10.1016/j.jimonfin.2025.103434","url":null,"abstract":"<div><div>We set up a New Keynesian model for a small open economy with dominant currency pricing, to study the response of domestic inflation to an increase in the US interest rate. We show that the sign of the inflation response crucially depends on the monetary policy regime: after a US monetary tightening, inflation decreases in countries with an exchange rate peg; it increases in countries with a flexible exchange rate, unless the country follows a strict inflation targeting: in this latter case, inflation barely moves. These results are consistent with empirical evidence in a sample of emerging economies, using local projection methods.</div></div>","PeriodicalId":48331,"journal":{"name":"Journal of International Money and Finance","volume":"159 ","pages":"Article 103434"},"PeriodicalIF":3.3,"publicationDate":"2025-09-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145096527","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Hedging sanctions risk: Cryptocurrency in central bank reserves","authors":"Matthew Ferranti","doi":"10.1016/j.jimonfin.2025.103433","DOIUrl":"10.1016/j.jimonfin.2025.103433","url":null,"abstract":"<div><div>Central banks may shift their international reserve holdings in order to protect themselves ex-ante against the risk of financial sanctions by fiat reserve currency issuers. For example, from 2016 to 2021, countries facing a higher risk of US sanctions increased the gold share of their reserves more than countries facing a lower risk of US sanctions. This paper explores the potential for Bitcoin to serve as an alternative hedging asset. I describe a dynamic Bayesian copula model to simulate the joint returns of Bitcoin and other reserve assets under a wide range of plausible sanctions probabilities, quantifying the extent to which varying levels of sanctions risk increase optimal gold, renminbi, and Bitcoin allocations. I conclude that sanctions risk may diminish the appeal of US Treasuries, propel broader diversification in central bank reserves, and bolster the long-run fundamental value of both cryptocurrency and gold.</div></div>","PeriodicalId":48331,"journal":{"name":"Journal of International Money and Finance","volume":"159 ","pages":"Article 103433"},"PeriodicalIF":3.3,"publicationDate":"2025-09-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145096528","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"A primer on bitcoin cross-border flows: Measurement and drivers","authors":"Eugenio Cerutti, Jiaqian Chen, Martina Hengge","doi":"10.1016/j.jimonfin.2025.103424","DOIUrl":"10.1016/j.jimonfin.2025.103424","url":null,"abstract":"<div><div>The rapid growth of crypto assets raises important questions about their cross-border usage. To gain a better understanding of cross-border Bitcoin flows, we use raw data covering both on-chain (on the Bitcoin blockchain) and off-chain (outside the Bitcoin blockchain) transactions globally. We provide a detailed description of available methodologies and datasets, and discuss the crucial assumptions behind the quantification of cross-border flows. We then present novel stylized facts about Bitcoin cross-border flows and study their global and domestic drivers. Bitcoin cross-border flows respond differently than capital flows to traditional drivers of capital flows, and differences appear between on-chain and off-chain Bitcoin cross-border flows. Off-chain cross-border flows seem correlated with incentives to avoid capital flow restrictions.</div></div>","PeriodicalId":48331,"journal":{"name":"Journal of International Money and Finance","volume":"159 ","pages":"Article 103424"},"PeriodicalIF":3.3,"publicationDate":"2025-09-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145096529","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"How does central bank independence influence the relationship between inflation, income inequality and poverty?","authors":"Bruno Pires Tiberto","doi":"10.1016/j.jimonfin.2025.103423","DOIUrl":"10.1016/j.jimonfin.2025.103423","url":null,"abstract":"<div><div>This study employs panel data analysis for 46 countries from 1980 to 2022 to investigate the impact of inflation on income inequality and poverty, highlighting the mitigating role of central bank independence. Using a comprehensive index of <em>de jure</em> central bank independence, the study assesses its influence on five measures of income inequality, four measures of poverty, and income deciles. The findings suggest structural factors are the main drivers of income inequality and poverty, rather than central bank independence. However, while inflation worsens these issues, central bank independence can counteract the adverse effects of inflation. Moreover, the evidence indicates greater central bank independence disproportionately benefits low-income households at the expense of high-income households, with these redistributive effects being more pronounced at higher levels of independence. In conclusion, central bank independence is pivotal in alleviating the negative impacts of inflationary shocks on income inequality and poverty, thereby promoting social and economic justice.</div></div>","PeriodicalId":48331,"journal":{"name":"Journal of International Money and Finance","volume":"159 ","pages":"Article 103423"},"PeriodicalIF":3.3,"publicationDate":"2025-09-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145049959","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Paola Di Casola , Maurizio Michael Habib , David Tercero-Lucas
{"title":"Global and local drivers of Bitcoin trading vis-à-vis fiat currencies","authors":"Paola Di Casola , Maurizio Michael Habib , David Tercero-Lucas","doi":"10.1016/j.jimonfin.2025.103405","DOIUrl":"10.1016/j.jimonfin.2025.103405","url":null,"abstract":"<div><div>We analyse global and local drivers of Bitcoin transactions against 45 fiat currencies in the largest peer-to-peer crypto exchanges. Global factors, such as momentum in the crypto-asset market or financial market volatility, do matter for Bitcoin trading. There is evidence of a global <em>crypto</em> cycle driven by speculative motives. Trading across currencies and users around the world moves in tandem with fluctuations in the Bitcoin price. Crypto shocks and global risk shocks are behind this cyclical comovement. Crucially, Bitcoin seems to also offer utility benefits in emerging and developing economies, since trading increases after idiosyncratic, currency-specific shocks that depreciate the currency. Local projections analysis and case studies confirm this important link between exchange rate instability and Bitcoin transactions.</div></div>","PeriodicalId":48331,"journal":{"name":"Journal of International Money and Finance","volume":"158 ","pages":"Article 103405"},"PeriodicalIF":3.3,"publicationDate":"2025-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144922106","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The impact of exchange rate fluctuations on markups – firm-level evidence for Switzerland","authors":"Elizabeth Steiner, Yannic Stucki","doi":"10.1016/j.jimonfin.2025.103422","DOIUrl":"10.1016/j.jimonfin.2025.103422","url":null,"abstract":"<div><div>This paper estimates the impact of exchange rate fluctuations on markups. Firm-level markups are estimated for a comprehensive panel of Swiss manufacturing firms for the period 2012–2017 using a production-function approach. The pass-through of the exchange rate is then estimated using an event–study design exploiting the large, sudden, and persistent appreciation of the Swiss franc against the euro in January 2015. The results show that following an appreciation, Swiss manufacturing firms adjust their markups very heterogeneously. Large firms, especially highly profitable large exporters, substantially decrease their markups. Owing to their sheer size, large firms shape the aggregate response. In contrast, the average firm does not respond significantly. This suggests that smaller firms, which are in the majority, are either unable or unwilling to absorb exchange rate movements by adjusting their markups.</div></div>","PeriodicalId":48331,"journal":{"name":"Journal of International Money and Finance","volume":"159 ","pages":"Article 103422"},"PeriodicalIF":3.3,"publicationDate":"2025-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145020221","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"An empirical inquiry into the distributional consequences of energy price shocks","authors":"Luca Eduardo Fierro , Mario Martinoli","doi":"10.1016/j.jimonfin.2025.103421","DOIUrl":"10.1016/j.jimonfin.2025.103421","url":null,"abstract":"<div><div>We estimate how energy shocks affect the functional distribution of income. Using structural vector autoregressions identified with an external instrument, we find that an increase in oil prices leads to a substantial and long-lasting decline in the wage share. Real aggregate wage income is significantly impacted, with a considerable part of this decline stemming from distributive dynamics. We also investigate possible asymmetries in the response to oil supply shocks, finding that the wage share is more sensitive to negative shocks than to positive ones. This suggests that wage earners lose from oil price hikes more than they benefit from declines.</div></div>","PeriodicalId":48331,"journal":{"name":"Journal of International Money and Finance","volume":"159 ","pages":"Article 103421"},"PeriodicalIF":3.3,"publicationDate":"2025-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145020220","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Stock market liberalization and corporate R&D disclosure: evidence from China","authors":"Zhi Jin , Tingting Duan , Bingxuan Lin , Ke Xu","doi":"10.1016/j.jimonfin.2025.103420","DOIUrl":"10.1016/j.jimonfin.2025.103420","url":null,"abstract":"<div><div>This paper investigates the impact of stock market liberalization on corporate R&D disclosure using the Mainland China–Hong Kong Stock Connect program as a quasi-natural experiment. Contrary to the widely held view that liberalization enhances overall corporate transparency, we find that the topics of R&D information disclosure are more scattered, and the narrative is less specific following liberalization. This effect is particularly pronounced among firms with higher proprietary costs. We argue that increased exposure to foreign investors intensifies competitive pressures, leading firms to strategically limit public disclosure of sensitive R&D information to mitigate the risk of information leakage. Additionally, we document a rise in private communications with investors post-liberalization, particularly on R&D-related topics, suggesting a deliberate shift toward more selective disclosure channels where firms can better control the audience and content of information shared.</div></div>","PeriodicalId":48331,"journal":{"name":"Journal of International Money and Finance","volume":"159 ","pages":"Article 103420"},"PeriodicalIF":3.3,"publicationDate":"2025-08-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144997592","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}