Edem Egnikpo*, Valentin Burban**

*There is consistent evidence that natural disasters generate greater and more persistent output losses in developing countries than in advanced economies. This paper shows that a key driver of this asymmetry is the size of the informal sector, which is typically larger in developing countries. Using a smooth-transition local projection method on a panel of 149 countries, I find that highly informal economies experience deeper and longer-lived growth contractions following storm shocks, whereas less informal economies are more resilient and recover faster. These results are robust to alternative specifications, different informality measures, and a broad set of country characteristics. Ongoing work develops a two-sector DSGE framework to explore the mechanisms through which informality may amplify disaster shocks.

**This paper examines whether international spillovers from Federal Reserve (Fed) and European Central Bank (ECB) monetary policy shocks transmit differently to euro area neighboring sovereign bond markets. Using a dynamic term structure model that accounts for non-linearities around the effective lower bound, I decompose sovereign yields into expectations and term premia for eight spillover-recipient economies and recover shadow short rates for policy-constrained periods. These estimates are combined with high-frequency monetary policy surprises from the Fed and the ECB to identify distinct spillover channels—aggregate demand, exchange rate, and risk-taking. I find that spillovers vary systematically across maturities and shock types. In particular, Fed and ECB shocks may propagate through different channels, and transmission is asymmetric between tightening and easing episodes. The results highlight the heterogeneous exposure of small open economies to global monetary policy and have important implications for the international transmission of unconventional and conventional policy actions.