The global impact of risk-off shocks

Ricardo Caballero () and Gunes Kamber

A chapter in Asia-Pacific fixed income markets: evolving structure, participation and pricing, 2019, vol. 102, pp 17-23 from Bank for International Settlements

Abstract: Global risk-off shocks can be highly destabilising for financial markets and, absent an adequate policy response, may trigger severe recessions. In Caballero and Kamber (2019), we document that the unconventional policies adopted by the main central banks were effective in containing asset price declines following risk-off episodes. These policies impacted long rates and inspired confidence in a policy-put framework that reduced the persistence of risk-off shocks. We also show that domestic macroeconomic and financial conditions play a key role in benefiting from the spillovers of these policies during risk-off episodes.

Date: 2019
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:bis:bisbpc:102-03

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