Three essays on the dynamics of global financial contagion: A macroeconomic analysis of intangible capital

The dissertation intricately explores the global economic responses to shocks with a nuanced focus on capital structures across different geographies. The first chapter examines the recovery patterns post-economic shocks, revealing how disparities in tangible and intangible capital ownership impact economic outcomes. A significant emphasis is placed on the distinction between core regions rich in intangible assets, such as R\&D, and peripheries dependent on external capital and burdened with knowledge rent obligations. Chapter two delves deeper into the mechanics of financial shocks within a globalized framework, employing a two-country macroeconomic model to distinguish between core and periphery economies. Our research indicates that intangible assets, serving as stable collateral, respond more robustly to economic shocks than traditional physical forms. Moreover, the study highlights the complex transmission mechanisms of productivity and leverage shocks, revealing that while the financial sector effectively assimilates the positive economic outcomes resulting from a productivity shock, leverage shocks, despite depleting capital, paradoxically stimulate overall economic output. In the third chapter, empirical methods test theoretical models to scrutinize the transmission mechanisms of macroeconomic shocks and their impacts on advanced versus emerging economies. This analysis supports a profound relationship between the proportion of intangible to tangible capital and an economy's ability to withstand financial shocks. Economies with lower shares of intangible capital showcase increased susceptibility, particularly to monetary and leverage shocks, reinforcing the disproportionate effects experienced in peripheral regions.