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Author | : M. Ayhan Kose |
Publisher | : |
Total Pages | : 43 |
Release | : 2009 |
Genre | : |
ISBN | : |
Download How Does Financial Globalization Affect Risk Sharing? Patterns and Channels Book in PDF, ePub and Kindle
In theory, one of the main benefits of financial globalization is that it should allow for more efficient international risk sharing. This paper provides a comprehensive empirical evaluation of the patterns of risk sharing among different groups of countries and examines how international financial integration has affected the evolution of these patterns. Using a variety of empirical techniques, we conclude that there is at best a modest degree of international risk sharing, and certainly nowhere near the levels predicted by theory. In addition, only industrial countries have attained better risk sharing outcomes during the recent period of globalization. Developing countries have, by and large, been shut out of this benefit. The most interesting result is that even emerging market economies, which have experienced large increases in cross-border capital flows, have seen little change in their ability to share risk. We find that the composition of flows may help explain why emerging markets have not been able to realize this presumed benefit of financial globalization. In particular, our results suggest that portfolio debt, which has dominated the external liability stocks of most emerging markets until recently, is not conducive to risk sharing.
Author | : M. Ayhan Kose |
Publisher | : International Monetary Fund |
Total Pages | : 48 |
Release | : 2007-10 |
Genre | : Business & Economics |
ISBN | : |
Download How Does Financial Globalization Affect Risk Sharing? Patterns and Channels Book in PDF, ePub and Kindle
In theory, one of the main benefits of financial globalization is that it should allow for more efficient international risk sharing. This paper provides a comprehensive empirical evaluation of the patterns of risk sharing among different groups of countries and examines how international financial integration has affected the evolution of these patterns. Using a variety of empirical techniques, we conclude that there is at best a modest degree of international risk sharing, and certainly nowhere near the levels predicted by theory. In addition, only industrial countries have attained better risk sharing outcomes during the recent period of globalization. Developing countries have, by and large, been shut out of this benefit. The most interesting result is that even emerging market economies, which have experienced large increases in cross-border capital flows, have seen little change in their ability to share risk. We find that the composition of flows may help explain why emerging markets have not been able to realize this presumed benefit of financial globalization. In particular, our results suggest that portfolio debt, which has dominated the external liability stocks of most emerging markets until recently, is not conducive to risk sharing.
Author | : Miklós Koren |
Publisher | : International Monetary Fund |
Total Pages | : 48 |
Release | : 2003-12-01 |
Genre | : Business & Economics |
ISBN | : 1451875614 |
Download Financial Globalization, Portfolio Diversification, and the Pattern of International Trade Book in PDF, ePub and Kindle
The paper provides a general-equilibrium model where incomplete international financial markets lead to insufficient industrial specialization and low international trade. As international portfolio diversification is limited and productivity is uncertain, investors wish to maintain a diversified industrial structure rather than specializing according to their comparative advantage. Financial globalization then induces more specialization and more trade. The present framework yields explicit closed-form solutions for the volume and the structure of trade. Empirical results support the implications of the theory. Trade in financially open countries is (i) higher, (ii) more dependent on productivity differences, and (iii) less sensitive to industry risks.
Author | : Mr.Ayhan Kose |
Publisher | : International Monetary Fund |
Total Pages | : 68 |
Release | : 2003-09-03 |
Genre | : Business & Economics |
ISBN | : 9781589062214 |
Download Effects of Financial Globalization on Developing Countries Book in PDF, ePub and Kindle
This study provides a candid, systematic, and critical review of recent evidence on this complex subject. Based on a review of the literature and some new empirical evidence, it finds that (1) in spite of an apparently strong theoretical presumption, it is difficult to detect a strong and robust causal relationship between financial integration and economic growth; (2) contrary to theoretical predictions, financial integration appears to be associated with increases in consumption volatility (both in absolute terms and relative to income volatility) in many developing countries; and (3) there appear to be threshold effects in both of these relationships, which may be related to absorptive capacity. Some recent evidence suggests that sound macroeconomic frameworks and, in particular, good governance are both quantitatively and qualitatively important in affecting developing countries’ experiences with financial globalization.
Author | : Ann Harrison |
Publisher | : University of Chicago Press |
Total Pages | : 674 |
Release | : 2007-11-01 |
Genre | : Business & Economics |
ISBN | : 0226318001 |
Download Globalization and Poverty Book in PDF, ePub and Kindle
Over the past two decades, the percentage of the world’s population living on less than a dollar a day has been cut in half. How much of that improvement is because of—or in spite of—globalization? While anti-globalization activists mount loud critiques and the media report breathlessly on globalization’s perils and promises, economists have largely remained silent, in part because of an entrenched institutional divide between those who study poverty and those who study trade and finance. Globalization and Poverty bridges that gap, bringing together experts on both international trade and poverty to provide a detailed view of the effects of globalization on the poor in developing nations, answering such questions as: Do lower import tariffs improve the lives of the poor? Has increased financial integration led to more or less poverty? How have the poor fared during various currency crises? Does food aid hurt or help the poor? Poverty, the contributors show here, has been used as a popular and convenient catchphrase by parties on both sides of the globalization debate to further their respective arguments. Globalization and Poverty provides the more nuanced understanding necessary to move that debate beyond the slogans.
Author | : Mr.Stijn Claessens |
Publisher | : International Monetary Fund |
Total Pages | : 66 |
Release | : 2013-01-30 |
Genre | : Business & Economics |
ISBN | : 1475561008 |
Download Financial Crises Explanations, Types, and Implications Book in PDF, ePub and Kindle
This paper reviews the literature on financial crises focusing on three specific aspects. First, what are the main factors explaining financial crises? Since many theories on the sources of financial crises highlight the importance of sharp fluctuations in asset and credit markets, the paper briefly reviews theoretical and empirical studies on developments in these markets around financial crises. Second, what are the major types of financial crises? The paper focuses on the main theoretical and empirical explanations of four types of financial crises—currency crises, sudden stops, debt crises, and banking crises—and presents a survey of the literature that attempts to identify these episodes. Third, what are the real and financial sector implications of crises? The paper briefly reviews the short- and medium-run implications of crises for the real economy and financial sector. It concludes with a summary of the main lessons from the literature and future research directions.
Author | : Mr.Akito Matsumoto |
Publisher | : International Monetary Fund |
Total Pages | : 40 |
Release | : 2009-09-01 |
Genre | : Business & Economics |
ISBN | : 1451873565 |
Download International Risk Sharing During the Globalization Era Book in PDF, ePub and Kindle
Though theory suggests financial globalization should improve international risk sharing, empirical support has been limited. We develop a simple welfare-based measure that captures how far countries are from the ideal of perfect risk sharing. We then take it to data and find international risk sharing has, indeed, improved during globalization. Improved risk sharing comes mostly from the convergence in rates of consumption growth among countries rather than from synchronization of consumption at the business cycle frequency. Our finding explains why many existing measures fail to detect improved risk sharing-they focus only on risk sharing at the business cycle frequency.
Author | : Nicola Cetorelli |
Publisher | : DIANE Publishing |
Total Pages | : 41 |
Release | : 2010-11 |
Genre | : Business & Economics |
ISBN | : 1437933874 |
Download Global Banks and International Shock Transmission Book in PDF, ePub and Kindle
Global banks played a significant role in transmitting the 2007-09 financial crisis to emerging-market (EM) economies. The authors examine adverse liquidity shocks on main developed-country banking systems and their relationships to EM across Europe, Asia, and Latin Amer., isolating loan supply from loan demand effects. Loan supply in EM across Europe, Asia, and Latin Amer. was affected significantly through three separate channels: (1) a contraction in direct, cross-border lending by foreign banks; (2) a contraction in local lending by foreign banks¿ affiliates in EM; and (3) a contraction in loan supply by domestic banks, resulting from the funding shock to their balance sheets induced by the decline in interbank, cross-border lending. Charts and tables.
Author | : Mr.Barry J. Eichengreen |
Publisher | : International Monetary Fund |
Total Pages | : 37 |
Release | : 2021-01-08 |
Genre | : Business & Economics |
ISBN | : 1513566385 |
Download Financial Globalization and Inequality: Capital Flows as a Two-Edged Sword Book in PDF, ePub and Kindle
We review the debate on the association of financial globalization with inequality. We show that the within-country distributional impact of capital account liberalization is context specific and that different types of flows have different distributional effects. Their overall impact depends on the composition of capital flows, their interaction, and on broader economic and institutional conditions. A comprehensive set of policies – macroeconomic, financial and labor- and product-market specific – is important for facilitating wider sharing of the benefits of financial globalization.
Author | : Augusto de la Torre |
Publisher | : World Bank Publications |
Total Pages | : 28 |
Release | : 2002 |
Genre | : Dolarizacion |
ISBN | : |
Download Financial globalization : unequal blessings Book in PDF, ePub and Kindle
De la Torre, Levy Yeyati, and Schmukler present a framework to analyze financial globalization. They argue that financial globalization needs to take into account the relation between money (particularly in its role as store of value), asset and factor price flexibility, and contractual and regulatory institutions. Countries that have the "blessed trinity" (international currency, flexible exchange rate regime, and sound contractual and regulatory environment) can integrate successfully into the world financial markets. But developing countries normally display the "unblessed trinity" (weak currency, fear of floating, and weak institutional framework). The authors define and discuss two alternative avenues (a "dollar trinity" and a "peso trinity") for developing countries to safely embrace international financial integration while the blessed trinity remains beyond reach. This paper--a product of the Office of the Chief Economist, Latin America and the Caribbean Region, and the Investment Climate Team, Development Research Group--is part of a larger effort in the Bank to assess the implications of financial globalization for emerging economies.