Capital Mobility and Financial Integration PDF Download

Author: Peter B. Kenen
Publisher:
ISBN:
Category : Business & Economics
Languages : en
Pages : 96

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Author: Tamim A. Bayoumi
Publisher: University of Michigan Press
ISBN: 9780472108701
Category : Business & Economics
Languages : en
Pages : 178

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Globalization, financial deregulation, a single European currency . . . this book examines what all these changes mean for the world economy.

Author: Peter Montiel
Publisher: World Bank Publications
ISBN:
Category :
Languages : en
Pages : 69

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Author: International Monetary Fund
Publisher: International Monetary Fund
ISBN: 145194831X
Category : Business & Economics
Languages : en
Pages : 40

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Book Description
This paper examines the extent of international financial integration, and its consequences for the current account. The evidence indicates that financial liberalization in the 1970s and 1980s has resulted in a substantial movement towards closer integration of world capital markets. By reducing constraints on international capital flows, this movement makes the current account more of a residual factor in agents’ decisions.

Author: Abdul G. Abiad
Publisher:
ISBN:
Category :
Languages : en
Pages : 70

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Recent studies have found that capital moves quot;uphillquot; from poor to rich countries, and, when it does flow into poor economies, it brings little or no growth dividend. This stylization is emerging as a new orthodoxy, with predictive and normative implications. In this paper, we report that Europe provides a counterexample that supports a more conventional textbook perspective. As financial integration in Europe has increased, capital has traveled quot;downhillquot; with gathering strength from rich to poor countries. Moreover, these inflows have been associated with significant acceleration of income convergence. Although sympathetic to a view that growth dynamics may vary across countries and regions for deep historical and geographical reasons, we do search for an overarching explanation. We find that countries above certain thresholds in institutional quality and in financial integration itself tend to experience stronger downhill capital flows; thresholds have a less clear impact on income convergence. Europe, however, remains different even when allowing for thresholds. Europe's recent experience bears closer correspondence with intranational flows within the United States. That leads to two possibilities. First, more akin to an intranational setting, the European experience may have limited relevance for regions where borders still represent significant barriers. However, the threshold effects of financial integration point to a second, more intriguing possibility: the downhill flow of capital observed in a highly integrated Europe may well be the leading edge, the bellwether. With the increased diversification associated with integration, countries' incentives to self-insure - through high savings rates and postponed consumption - may become less compelling.

Author: Nina Pohl
Publisher: diplom.de
ISBN: 3832426418
Category : Political Science
Languages : en
Pages : 203

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Inhaltsangabe:Abstract: This paper deals with three highly controversial aspects in the international finance literature: the degree of international financial integration, the economic impact of capital mobility, and the potential role of capital controls in the emerging international financial architecture. Regarding the first aspect, many observers have been influenced by the recent hype about globalisation and in fact take it for granted that capital markets have become almost fully integrated into a world financial marketplace. This paper, reviews evidence that challenges this conventional wisdom, though confirming that the degree of international financial integration is rising. With respect to the second aspect, it is demonstrated that there are circumstances under which the free flow of international capital could negatively impact upon economic performance and/or otherwise welfare-enhancing domestic policies. This finding conflicts with traditional theory and provides an economic rationale for the judicious introduction of capital controls. With this assertion in mind, the final aspect, the role of capital controls, is investigated. The specific question explored is how far restrictions on international capital flows are able to avert a costly economic imbalance arising from fluctuations in the balance of payments. Although the international consensus seems to have shifted in recent years towards promoting Chilean-style capital controls as a potential new building block in the international financial landscape, this paper cautions against such a generalisation of the Chilean experience. Rather, a review of the empirical literature suggests that much of Chile s economic success story in the last decade can be explained by factors other than its control regime. The rising degree of international financial integration enhances the need for small countries to resolve their dilemma of being dependent on external funding and, at the same time, most vulnerable to sudden reversals of international capital flows. Yet, simple solutions of how to counterbalance the potential threats of capital mobility in a second-best equilibrium, are not found to be easily forthcoming. In particular, this paper argues that capital controls are no panacea even less so, if they delay necessary macro- and microeconomic reforms. A worrying feature of the international financial system, partly due to continued innovations in financial engineering, is that [...]

Author: Joshua Aizenman
Publisher:
ISBN:
Category :
Languages : en
Pages : 39

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Book Description
The accumulated experience of emerging markets over the past two decades has laid bare the tenuous links between external financial integration and faster growth, on the one hand, and the proclivity of such integration to fuel costly crises on the other. These crises have not gone without learning. During the 1990s and 2000s, emerging markets converged to the middle ground of the policy space defined by the macroeconomic trilemma, with growing financial integration, controlled exchange rate flexibility, and proactive monetary policy. The OECD countries moved much faster toward financial integration, embracing financial liberalization, opting for a common currency in Europe, and for flexible exchange rates in other OECD countries. Following their crises of 1997-2001, emerging markets added financial stability as a goal, self-insured by building up international reserves, and adopted a public finance approach to financial integration. The global crisis of 2008-2009, which originated in the financial sector of advanced economies, meant that the OECD "overshot" the optimal degree of financial deregulation while the remarkable resilience of the emerging markets validated their public finance approach to financial integration. The story is not over: with capital flowing in droves to emerging markets once again, history could repeat itself without dynamic measures to manage capital mobility as part of a comprehensive prudential regulation effort.

Author: Peter J. Montiel
Publisher:
ISBN:
Category : Capital movements
Languages : en
Pages : 72

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Book Description
It is rare for developing countries to be strongly integrated with financial markets, but most developing countries must be regarded as financially open, according to new estimates.

Author: Mr.Gian Milesi-Ferretti
Publisher: International Monetary Fund
ISBN: 1451850905
Category : Business & Economics
Languages : en
Pages : 46

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Book Description
In recent decades, the foreign assets and liabilities of advanced economies have grown rapidly relative to GDP, with the increase in gross cross-holdings far exceeding changes in the size of net positions. Moreover, the portfolio equity and FDI categories have grown in importance relative to international debt stocks. This paper describes the broad trends in international financial integration for a sample of industrial countries and seeks to explain the cross-country and time-series variation in the size of international balance sheets. It also examines the behavior of the rates of return on foreign assets and liabilities, relating them to "market" returns.

Author: Pierre-Richard Agénor
Publisher: World Bank Publications
ISBN:
Category : Capital movements
Languages : en
Pages : 68

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Book Description
This literature review joins with recent studies in arguing that financial integration must be carefully prepared and managed to ensure that the benefits outweigh the short-run risks. But in contrast with some other studies, it adopts a more skeptical view of the benefits of capital flows other than foreign direct investment.