Demand for Safe Assets and Spillovers from the Global Dollar Cycle
IMF Working Papers, April 4, 2025
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- Demand for Safe Assets and Spillovers from the Global Dollar Cycle
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Bibliographic details
- Authors: Cian Allen, Rudolfs Bems, Lukas Boer, Racha Moussa
- Published: April 4, 2025
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798229007092.001
Summary findings
- US dollar appreciations can inflict sizable negative cross-border spillovers.
- The paper investigates spillovers originating from flight-to-safety shocks and the accompanying “global dollar cycle”.
- Negative real sector spillovers from US dollar appreciations fall disproportionately on emerging markets.
- Effects on advanced economies are small and short-lived.
- Emerging market commodity exporters historically experienced larger negative spillovers than commodity importers, reflecting a strong negative link between the US dollar and commodity prices.
Policy implications
- More anchored inflation expectations can mitigate the initial negative spillovers.
- More flexible exchange rates can speed up the subsequent economic recovery.
Key statistics and publication metadata
- Authors: Cian Allen, Rudolfs Bems, Lukas Boer, Racha Moussa
- Publication date: April 4, 2025
- Pages: 54
- Volume: 2025
- Issue: 065
- Series: Working Paper No. 2025/065
- DOI: https://doi.org/10.5089/9798229007092.001
- Stock No: WPIEA2025065
- ISBN: 9798229007092
- ISSN: 1018-5941
IMF Working Paper — "Demand for Safe Assets and Spillovers from the Global Dollar Cycle" (April 4, 2025) by Cian Allen, Rudolfs Bems, Lukas Boer, and Racha Moussa.
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