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We study how cross-country macroeconomic spillovers caused by sovereign default affect equilibrium bailouts. Because of portfolio diversification, the default of one country causes a macroeconomic contraction in other countries, which motivates a bailout. But why do creditor countries choose to bailout debtor countries instead of their own private sector? We show that this is because an external bailout could be cheaper than a domestic bailout. We also show that although anticipated bailouts lead to higher borrowing, they can be Pareto improving not only ex post (after a country has defaulted) but also ex ante (before the country chooses its debt). [ABSTRACT FROM AUTHOR]

As someone interested in measuring disagreement inpolitical decision-making and then understanding itsmacroeconomic implications, I developed the PartisanConflict Index (PCI) in my 2018 paper "Partisan Conflictand Private Investment." But as economists, no matter its origins, we mustgauge the level of policy disagreements, place them incontext and, critically, try to better understand theimplications for the economy. We will also concentrate attention here on theU.S. given its economic importance and because data andanalyses are available to draw upon, even though our aimremains more general: to connect legislative disagreementto economic outcomes and policies in any major economy. [Extracted from the article]

Foreign direct investment (FDI), as pointed out by Kindleberger (1969), arises when the host country has an investment opportunity that it cannot exploit by itself because it lacks the means [...]

This article discusses the concept of economic policy uncertainty (EPU) and its measurement techniques. EPU refers to the lack of clarity or predictability regarding government policies that have economic implications. The article explores the drivers of EPU, including geopolitical risk and partisan conflict. It also examines the impact of EPU during election years, finding that it significantly increases during close and polarized elections. The increase in EPU can have a significant impact on business and consumer spending decisions. The article concludes by highlighting the upcoming 2024 U.S. election and its potential global impact on EPU. [Extracted from the article]

This article examines the underrepresentation of women in research departments at Federal Reserve Banks and explores the factors contributing to this disparity. The data shows that women are more likely to work in academia than at the Reserve Banks, and within academia, they are less likely to be in research tracks compared to men. The article suggests that women may prefer non-research career tracks at universities due to the flexibility they offer. While the representation of women at the Reserve Banks has been slowly increasing, proactive measures are needed to attract and retain female talent, particularly in fields relevant to monetary policy and central banking. The article also discusses the impact of family decisions on women's careers and the importance of creating a supportive ecosystem to foster a more inclusive and gender-balanced community at the Federal Reserve Banks. [Extracted from the article]