Eswar Prasad is the Tolani Senior Professor of Trade Policy and Professor of Economics at Cornell University. He is also a Senior Fellow at the Brookings Institution, where he holds the New Century Chair in International Economics, and a Research Associate at the National Bureau of Economic Research. He was previously chief of the Financial Studies Division in the International Monetary Fund’s Research Department and, before that, was the head of the IMF’s China Division.

Prasad's latest book is Gaining Currency: The Rise of the Renminbi (Oxford University Press, October 2016). His previous books include the award-winning The Dollar Trap: How the U.S. Dollar Tightened Its Grip on Global Finance (Princeton University Press, 2014) and Emerging Markets: Resilience and Growth Amid Global Turmoil (with M. Ayhan Kose; Brookings Institution Press, 2010). His extensive publication record includes articles in numerous collected volumes as well as top academic journals such as the American Economic Review, American Economic Journal: Macroeconomics, Brookings Papers on Economic Activity, The Economic Journal, International Economic Review, Journal of Development Economics, Journal of Economic Perspectives, Journal of International Economics, Journal of International Money and Finance, Journal of Monetary Economics, and Review of Economics and Statistics. He has co-authored and edited numerous books and monographs, including on financial regulation and on China and India.

Prasad has testified before various U.S. Congressional Committees, including the Senate Finance Committee, the House of Representatives Committee on Financial Services, and the U.S.-China Economic and Security Review Commission. He was a member of the analytical team that drafted the 2008 report of the High-Level Committee on Financial Sector Reforms set up by the Government of India and is the Lead Academic for the DFID-LSE International Growth Center’s India Growth Research Program. He is the creator of the Brookings-Financial Times world index (TIGER: Tracking Indices for the Global Economic Recovery; His op-ed articles have appeared in the Financial Times, Foreign Policy, Harvard Business Review, New York Times, Wall Street Journal, and the Washington Post and other newspapers. He has made frequent appearances on BBC, Bloomberg, CNBC, CNN, C-SPAN, Fox, NBC, NPR, PBS, Reuters, and other radio and television channels.

He has been a Research Fellow at IZA since 2002.



IZA Discussion Paper No. 11311

Employer-provided nonwage benefit expenditures now account for one-third of U.S. firms' labor costs. We show that a broad measure of real labor costs including such benefit expenditures has become countercyclical during 1982-2014, contrary to the conventional view that labor costs are procyclical. Using BLS establishment-job data, we find that even...

IZA Discussion Paper No. 9405

We examine how emerging market (EM) investors allocate their stock portfolios internationally. Using both country-level and institution-level data, we find that the coming wave of EM investors systematically over- and under-weight their holdings in some target countries. These abnormal foreign allocation biases of EM investors offer robust support of the...

IZA Discussion Paper No. 9272

We develop a two-sector, heterogeneous-agent model with incomplete financial markets to study the distributional effects and aggregate welfare implications of alternative monetary policy rules in emerging market economies. Relative to inflation targeting, exchange rate management benefits households in the tradable goods sector but in the long run these households are...

IZA Discussion Paper No. 9219
published in: Journal of Monetary Economics, 2015, 74, 102-116

In closed or open economy models with complete markets, targeting core inflation enables monetary policy to maximize welfare by replicating the flexible price equilibrium. We analyze this result in the context of developing economies, where a large proportion of households are credit constrained and the share of food expenditures in...

IZA Discussion Paper No. 7777
published in: IMF Economic Review, 2014, 62 (3), 409-429

Distributional consequences typically receive limited attention in economic models that analyze the effects of monetary and financial sector policies. These consequences deserve more attention since financial markets are incomplete, imperfect, and economic agents' access to them is often limited. This limits households' ability to insure against household-specific (or sector-specific) shocks...

IZA Discussion Paper No. 6335
Eswar Prasad, Lei (Sandy) Ye
published in: Proceedings of the 2011 Asia Economic Policy Conference, Federal Reserve Bank of San Francisco, 2011, 127-197

We analyze three related but distinct concepts concerning the renminbi's role in the global monetary system: (i) "internationalization" of the currency; (ii) currency convertibility; and (iii) reserve currency status. Their sequencing in relation to other policy goals such as financial sector reforms and exchange rate flexibility will affect their benefit-risk...

IZA Discussion Paper No. 6032
published in: Proceedings of the 2011 Jackson Hole Symposium, Federal Reserve Bank of Kansas City, 2011, 391-398

I document that emerging markets have cast off their "original sin" – their external liabilities are no longer dominated by foreign-currency debt and have instead shifted sharply towards direct investment and portfolio equity. Their external assets are increasingly concentrated in foreign exchange reserves held in advanced economy government bonds. Given...

IZA Discussion Paper No. 5331
published in: Journal of Development Economics, 2013, 105, 164-177

China's household saving rate has increased markedly since the mid-1990s and the age-saving profile has become U-shaped. Using a panel of urban Chinese households covering 1989-2006, we document a sharp increase in income uncertainty. While the permanent variance of household income was stable, the transitory variance rose sharply. Based on...

IZA Discussion Paper No. 5233
published in: Masahiro Kawai and Eswar Prasad (eds.), Financial Sector Reforms and Regulation in Emerging Markets, Washington, DC: Brookings Institution Press, 2011, 3-24

This paper provides an overview of the complex conceptual and practical challenges that emerging market economies face as they attempt to reform their frameworks for financial regulation. These economies are striving to balance the quest for financial stability with the imperatives of financial development and broader financial inclusion. I argue...

IZA Discussion Paper No. 5137

In models with complete markets, targeting core inflation enables monetary policy to maximize welfare by replicating the flexible price equilibrium. In this paper, we develop a two-sector two-good closed economy new Keynesian model to study the optimal choice of price index in markets with financial frictions. Financial frictions that limit...