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An Imperfect Financial Union With Heterogeneous Regions

An Imperfect Financial Union With Heterogeneous Regions
Author: Filippo Balestrieri
Publisher: International Monetary Fund
Total Pages: 66
Release: 2018-09-11
Genre: Business & Economics
ISBN: 1484375637

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We analyze a union of financially-integrated yet politically-sovereign countries, where households in the Northern core of the union lend to those in the Southern periphery in a unified debt market subject to a borrowing constraint. This constraint generates sudden stops throughout the South, depresses the intra-union interest rate, and reduces Northern welfare below its unconstrained level, while having ambiguous effects on Southern welfare. During sudden stops, Pareto improvements can be achieved using North-to-South governmental loans if Southern governments have the capacity to commit to repay, or using a combination of Southern debt relief and budget-neutral taxes and subsidies if they do not. From the pre-crisis perspective, it is Pareto-improving to allow loans and debt relief to be negotiated in later sudden-stop periods as long as the regions in the union are sufficiently heterogeneous to begin with. We show that our results are robust to production and to limited financial openness of the union.


An Imperfect Financial Union With Heterogeneous Regions

An Imperfect Financial Union With Heterogeneous Regions
Author: Filippo Balestrieri
Publisher: International Monetary Fund
Total Pages: 66
Release: 2018-09-11
Genre: Business & Economics
ISBN: 1484376730

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We analyze a union of financially-integrated yet politically-sovereign countries, where households in the Northern core of the union lend to those in the Southern periphery in a unified debt market subject to a borrowing constraint. This constraint generates sudden stops throughout the South, depresses the intra-union interest rate, and reduces Northern welfare below its unconstrained level, while having ambiguous effects on Southern welfare. During sudden stops, Pareto improvements can be achieved using North-to-South governmental loans if Southern governments have the capacity to commit to repay, or using a combination of Southern debt relief and budget-neutral taxes and subsidies if they do not. From the pre-crisis perspective, it is Pareto-improving to allow loans and debt relief to be negotiated in later sudden-stop periods as long as the regions in the union are sufficiently heterogeneous to begin with. We show that our results are robust to production and to limited financial openness of the union.


Heterogeneous Countries in a Financial Union

Heterogeneous Countries in a Financial Union
Author: Filippo Balestrieri
Publisher:
Total Pages: 70
Release: 2015
Genre:
ISBN:

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A financial union is a group of countries, each with its own nontradable goods sector, which can freely exchange tradable goods and debt contracts. In this paper, we establish the effects of shocks in a stylized financial union with heterogeneous regions -- a lender North and a borrower South -- and constraints on borrowing. We derive positive and normative results. First, when the degree of heterogeneity is high before the shock, the South is disproportionately hurt by the shock, no matter whether the shock strikes in the North or the South. Second, for a given value of the shock, when borrowing constraints bind in the South, the welfare of the North decreases while the welfare of the South may increase. Third, we characterize which policy interventions are able to generate Pareto improvements. Unconditional debt relief for the South fails to do so. Subsidized governmental loans succeed when Southern governments can commit to repay additional debt. Finally, whether or not Southern governments can commit to repay anything, a Pareto improvement is possible using a combination of conditional debt relief and a tax/subsidy package in the South.


Exchange Rate Regimes in East Asia

Exchange Rate Regimes in East Asia
Author: Masahiro Kawai
Publisher: Taylor & Francis
Total Pages: 493
Release: 2004-08-02
Genre: Social Science
ISBN: 1134351933

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Gordon De Brouwer is an experienced Routledge author All contributors are leading researchers in the field and are mainly from Australia, Japan and Korea


Financial Integration in the European Monetary Union

Financial Integration in the European Monetary Union
Author: Sławomir Ireneusz Bukowski
Publisher: Taylor & Francis
Total Pages: 143
Release: 2019-11-21
Genre: Business & Economics
ISBN: 0429577729

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This book introduces readers to the world of international financial markets and their integration on a global and regional scale. The author presents the theoretical and practical issues concerning the processes of financial market integration, with a particular focus on the monetary union. The empirical research results are based on econometric modeling, thus simplifying them for a non-specialist audience, who can instead concentrate on the author’s conclusions, which comprise the results of these complicated research methods. The author outlines the role and functions of financial markets in the economy, in particular the relationship between financial intermediaries and financial markets and tackles the question of integration of new EU member countries’ financial markets within the eurozone. The integration of financial markets in an international context is inevitable, and the author argues that we must learn how to benefit from it from in terms of economic growth. This book will be a valuable resource for students of economics and finance, particularly those studying financial management and international business and finance, as well as professionals in these fields. Further, this book will be of interest to anyone looking to discover more about the problems of globalization and the integration of financial markets into the modern economy.


West African Economic and Monetary Union

West African Economic and Monetary Union
Author: Patrick A. Imam
Publisher: International Monetary Fund
Total Pages: 46
Release: 2013-10-22
Genre: Business & Economics
ISBN: 1484348222

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The financial system in the WAEMU remains largely bank-based. The banking sector comprises 106 banks and 13 financial institutions, which together hold more than 90 percent of the financial system’s assets (about 54 percent of GDP at end-2011). Five banks account for 50 percent of banking assets. The ownership structure of the sector is changing fast, with the rapid rise of foreign-owned (pan-African) banks. This contributes to higher competition but also rising heterogeneity in the banking system, with large and profitable cross-country groups competing with often weaker country-based (and sometime government-owned) banks. Nonbank financial institutions are developing quickly, notably insurance companies, but remain overall small. This paper presents a detailed analysis of the banking system.


Report on Financial Structures

Report on Financial Structures
Author: European Central Bank
Publisher:
Total Pages: 376
Release: 2002
Genre: Aktiemarkeder
ISBN:

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Routledge Handbook of the Economics of European Integration

Routledge Handbook of the Economics of European Integration
Author: Harald Badinger
Publisher: Routledge
Total Pages: 677
Release: 2015-10-05
Genre: Business & Economics
ISBN: 1317751965

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Routledge Handbook of the Economics of European Integration provides readers with a brief but comprehensive overview of topics related to the process of European integration in the post-World War II period. Its short chapters reflect the most up-to-date and concise research, written by a collective of experts on their own subjects. The aim of this book is twofold. Firstly, the text illustrates the broad and diverse range of issues associated with European integration, and lastly, the key approaches and findings are summarised. Since institutional integration in Europe is an ongoing process, with possibly frequent and sometimes rapid changes, the chapters are intended to focus on the key features of the economic analyses of these topics. A wide and diverse set of economic issues is of direct relevance for European integration. These topics cover various fields, ranging from the history of the European Economic and Monetary Union, EU Trade Policy and the stability of international trade, single market issues over fiscal, monetary and other policies, the crisis that faces the Euro area, and institutions such as EU Council of Ministers. Not surprisingly, many of these issues have also been analysed from a European perspective. This handbook is designed to provide students, researchers, the public and policy makers with ready and accessible knowledge of issues related to European integration and will provide the definitive overview of research in the area.


Regional Economy of India

Regional Economy of India
Author: Deepak Mohanty
Publisher:
Total Pages: 516
Release: 2012
Genre: Business & Economics
ISBN:

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Regional economy is of critical importance to achieve inclusive growth and to sustain growth momentum, and the essays in this collection focus on the growth and finance of various states in India. This volume, comprised of articles written by scholars at the Reserve Bank of India, stimulates further policy-oriented research and contributes to better policymaking. The book contends that the share of agriculture has shrunk across the states while the share of services has risen sharply, and that there is a need for action on agricultural growth, infrastructure development, and prioritization of expenditure toward social sectors to develop the quality of the labor force and promote well-being. Also included are a foreword by Duvvuri Subbarao and a preface by Subir Gokarn, the governor and deputy governor, respectively, of the Reserve Bank of India. Students, researchers, economists, bankers, and policymakers with special interest in India’s regional economy will find this a valuable and thought-provoking resource.


Regional Integration – Europe and Asia Compared

Regional Integration – Europe and Asia Compared
Author: Woosik Moon
Publisher: Taylor & Francis
Total Pages: 243
Release: 2017-07-05
Genre: Business & Economics
ISBN: 1351905511

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This book examines and compares the integration process in both Europe and Asia, and draws some possible lessons for East Asia from the European experience. The book embraces the political dimension of integration (peace and security), economic, trade and monetary aspects, as well as cultural aspects.