International Financial Integration in the Aftermath of the Global Financial Crisis
By Philip R. Lane, G. Milesi-Ferretti. Social Science Research Network, 2017
246 citations recorded by the source corpus.
This paper documents the evolution of international financial integration since the global financial crisis using an updated dataset on external assets and liabilities, covering over 210 economies for the period 1970-2015. It finds that the growth in cross-border positions in relation to world GDP has come to a halt. This reflects much weaker capital flows to and from advanced economies, with diminished cross-border banking activity, and an increase in the weight of emerging economies in global GDP, as these economies have lower external assets and liabilities than advanced economies. Cross-border FDI positions have continued to expand, unlike positions in portfolio instruments and other investment. This expansion reflects primarily positions vis-a-vis financial centers, suggesting that the complexity of the corporate structure of large multinational corporations is playing an important role. The paper also explores the cross-country drivers of foreign ownership of domestic debt securities, highlighting in particular the role of the euro debt crisis in explaining its evolution.
Subfields: Finance
View Paper: https://www.semanticscholar.org/paper/fbb284b272f755a297c65676b1a645475bc5cf22
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Citations in the corpus
- The Volatility of Capital Flows in Emerging Markets: Measures and Determinants (2017, background): “23 See for instance Lane (2013), Lane and Milesi-Ferretti (2017).”
- Foreign effects of higher U.S. interest rates (2019, background): “The source is the External Wealth of Nations Mark II database (Lane and Milesi-Ferretti, 2017).”
- How Important is the Global Financial Cycle? Evidence from Capital Flows (2017, unknown): “…flows, local banks are especially affected by global factors, with a lower VIX leading to lower local borrowing rates and greater credit supply, 8 Milesi-Ferretti and Tille (2011) and Lane and Milesi-Ferretti (2017) document the large shifts and cross-country heterogeneity in flows post-GFC.”