International Capital Flows and Monetary Policy Spillovers

This dissertation examines the drivers and implications of international capital flows. The overarching motivation is the observation that countries not at the centre of global financial markets are subject to considerable spillovers from centre countries, notably from their monetary policy. I present new empirical evidence on the determinants of the observed patterns of international capital flows and monetary policy spillovers, and study their effect on both financial markets and the real economy. In Chapter 2 I provide evidence on the determinants of a puzzling negative correlation observed between productivity growth and net capital inflows to developing and emerging market economies (EMEs) since 1980. By disaggregating net capital inflows into their gross components, I show that this negative correlation is explained by capital outflows related to purchases of very liquid assets from the fastest growing countries. My results suggest a desire for international portfolio diversification in liquid assets by fast growing countries is driving much of the original puzzle. In the reminder of my dissertation I pivot to study the foreign characteristics that drive international capital flows and monetary policy spillovers, with a particular focus on the role of unconventional monetary policy in the United States (U.S.). In Chapter 3 I show that a significant portion of the heterogeneity in EMEs' asset price adjustment following the quantitative easing operations by the Federal Reserve (the Fed) during 2008-2014 can be explained by the degree of bilateral capital market frictions between these countries and the U.S. This is true even after accounting for capital controls, exchange rate regimes, and domestic monetary policies. Chapter 4, co-authored with Michal Ksawery Popiel, studies unconventional monetary policy in a small open economy, looking specifically at the case of Canada since the global financial crisis. We quantify the effect Canadian unconventional monetary policy shocks had on the real economy, while carefully controlling for and quantifying spillovers from U.S. unconventional monetary policy. Our results indicate that the Bank of Canada's unconventional monetary policy increased Canadian output significantly from 2009-2010, but that spillovers from the Fed's policy were even more important for increasing Canadian output after 2008.

Ablation of Steel by Microsecond Pulse Trains

Laser micromachining is an important material processing technique used in industry and medicine to produce parts with high precision. Control of the material removal process is imperative to obtain the desired part with minimal thermal damage to the surrounding material. Longer pulsed lasers, with pulse durations of milli- and microseconds, are used primarily for laser through-cutting and welding. In this work, a two-pulse sequence using microsecond pulse durations is demonstrated to achieve consistent material removal during percussion drilling when the delay between the pulses is properly defined. The light-matter interaction moves from a regime of surface morphology changes to melt and vapour ejection. Inline coherent imaging (ICI), a broadband, spatially-coherent imaging technique, is used to monitor the ablation process. The pulse parameter space is explored and the key regimes are determined. Material removal is observed when the pulse delay is on the order of the pulse duration. ICI is also used to directly observe the ablation process. Melt dynamics are characterized by monitoring surface changes during and after laser processing at several positions in and around the interaction region. Ablation is enhanced when the melt has time to flow back into the hole before the interaction with the second pulse begins. A phenomenological model is developed to understand the relationship between material removal and pulse delay. Based on melt refilling the interaction region, described by logistic growth, and heat loss, described by exponential decay, the model is fit to several datasets. The fit parameters reflect the pulse energies and durations used in the ablation experiments. For pulse durations of 50 us with pulse energies of 7.32 mJ +/- 0.09 mJ, the logisitic growth component of the model reaches half maximum after 8.3 us +/- 1.1 us and the exponential decays with a rate of 64 us +/- 15 us. The phenomenological model offers an interpretation of the material removal process.