Class of 1958 Professor of Economics
Department of Economics
Maurice Obstfeld is the Class of 1958 Professor of Economics at the University of California, Berkeley. Professor Obstfeld serves as honorary advisor to the Bank of Japan's Institute of Monetary and Economic Studies. He is a Fellow of the Econometric Society and the American Academy of Arts and Sciences. He is also Research Fellow at the Center for Economic Policy and Research (London, England), a Research Associate at the National Bureau of Economic Research (Cambridge, Massachusetts), and an International Research Fellow at the Kiel Institute of World Economics. Professor Obstfeld has published extensively in international economics, macroeconomics and monetary economics. Most recently his work has focused on dynamic open-economy models with nominal rigidities, exchange rates and international financial crises, global capital-market integration in a historical perspective, and monetary policy in open economies.
Summary of recent papers:
Date: June 8, 2017
Coauthors: Jonathan David Ostry (IMF); Mahvash S. Qureshi (IMF)
Citation: IMF Working Paper 17/130
This paper examines the claim that exchange rate regimes are of little salience in the transmission of global financial conditions to domestic financial and macroeconomic conditions by focusing on a sample of about 40 emerging market countries over 1986–2013. The findings show that exchange rate regimes do matter. Countries with fixed exchange rate regimes are more likely to experience financial vulnerabilities—faster domestic credit and house price growth, and increases in bank leverage—than those with relatively flexible regimes. The transmission of global financial shocks is likewise magnified under fixed exchange rate regimes relative to more flexible (though not necessarily fully flexible) regimes. The authors attribute this to both reduced monetary policy autonomy and a greater sensitivity of capital flows to changes in global conditions under fixed rate regimes.
Date: September 26, 2016
Coauthors: Kevin Clinton ; Ondra Kamenik ; Douglas Laxton ; Yulia Ustyugova ; Hou Wang (all IMF)
Citation: IMF Working Paper 16/192
Routine publication of the forecast path for the policy interest rate (i.e. “conventional forward guidance”) would improve the transparency of monetary policy. It would also improve policy effectiveness through its influence on expectations, particularly when there is a risk of low inflation, and the policy rate is constrained by the effective lower bound. Model simulations indicate that a potent macroeconomic strategy, for returning the Canadian economy to potential, combines conventional forward guidance with a fiscal stimulus. As a response to the effective lower bound constraint, and the decline in the world equilibrium real interest rate, this strategy is preferable to raising the inflation target.