2020 was the year I explored International Macro (in a very broad sense) the most; and for someone trying to start a serious path on Macroeconomics I found it to be full of very interesting results and many open questions. For anyone interested here is a thread on some papers:

First, on the role of foreign exchange interventions by Central Banks there has been apparently never too much of a consensus on whether they can be effective or not. This is one area in which practice was seemingly ahead of theory, one could said.

The standard RBC-result with complete markets and all nicely things tells us that, in a two-country model, FX interventions cannot have any role, because agents will completely offset the intervention by buying foreign bonds. Thus, these actions cannot have real effects.

BUT, what if we introduce some rigidities? That is one step taken by Maggiori and Gabaix here: http://pages.stern.nyu.edu/~xgabaix/papers/IntLiquidity.pdf. Here, they introduce frictions on financial intermediaries, or investors.

Particularly, investors are not able to absorb or take all the currency-related risk, so they cannot offset all the currency imbalances. The higher this friction, the more effective can FX interventions be. This is used by Davis, Devereux and Yu here: https://www.nber.org/papers/w28079#:~:text=This%20paper%20shows%20that%20foreign,small%20open%20emerging%20market%20economy.&text=When%20the%20central%20bank's%20stock,cannot%20prevent%20a%20sudden%20stop.

In a similar way, the desirability to accumulate reserve and the use of macroprudential policy to prevent sudden stops and large crises in general, has been another topic of debate.

For instance, it might be that agents do not internalize all the consequences for their actions. When a negative shock hits the open economy, the real exchange rate depreciates, affecting the agent’s ability to borrow.

If they hit their borrowing limit this will induce a fire sale of assets, that would further depreciate the real exchange rate, thus fueling the initial negative effects on the economy.

In a situation like this, macroprudential policy that prevents agents from over-borrowing before the onset of a crisis can have positive results in reducing the frequency and severity of crises.

Mendoza: https://www.aeaweb.org/articles?id=10.1257/aer.100.5.1941. Bianchi: https://www.nber.org/papers/w19362  and Korinek/Mendoza: https://www.nber.org/papers/w19362  are very useful references here.

However, what happens if every country implements prudential policies at the same time? One of the papers I liked the most, “The Paradox of Global Thrift” by Fornaro and Romei: https://www.crei.cat/wp-content/uploads/2018/04/globthrift_april2018.pdf has something to say about this.

Since quite some years now, many developed economies have been dealing with extremely low interest rates (that is another discussion). In such a situation, monetary policy is likely to be less effective. Then, countries might resort to fiscal and financial policies complement it

There might be countries in which the ZLB is binding and others in which it is not (booming countries). If some of the latter countries put in place prudential policies, so to avoid overborrowing and the prospect of more severe crises, this increases the global supply of savings

Then, the worldwide economy faces a lower aggregate demand that might hinder the ability of countries already in the ZLB to put in place effective policies to counteract the economic downturn, which could end up making the global liquidity trap even worse.

Finally, one paper that greatly served me in getting some intuition on the role of currency pegs and the effects of externalities in an open economy is this one by Schmitt-Grohé and Uribe: http://www.columbia.edu/~mu2166/dnwr_pegs_iu/paper.pdf