香蕉视频

Sun Yong Kim

Northwestern University

Global Footprint of US Fiscal Policy

Date: Friday, January 31, 2025
Time: 11:30 AM - 1:00 PM
Location: Bronfman building, Room 245

All are cordially invited to attend.

Abstract

The US fiscal condition is the most important fiscal determinant of global risky asset prices. Financial markets around the world pay closer attention to the US fiscal condition than to i) the local fiscal condition or ii) foreign fiscal conditions outside the US. To explain these striking results, I advance a novel mechanism that emphasises the special US role as the global innovation leader. This empowers the US fiscal policy with a large international transmission across the global innovation network, enabling it to influence i) global growth, ii) the global fiscal cycle, iii) global policy uncertainty and consequently iv) global risk-premia. The model qualitatively and quantitatively accounts for my empirical findings with the key testable predictions verified in the data.