Why is financial stability essential for key currencies in the international monetary system?

Linda Goldberg, Signe Krogstrup, John Lipsky, Hélène Rey, 26 July 2014

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Could the dollar lose its status as the key international currency for international trade and international financial transactions, and if so, what would be the principal contributing factors? Speculation about this issue has long been abundant, and views diverse. After the introduction of the euro, there was much public debate about the euro displacing the dollar (Frankel 2008).

Topics: Financial markets, International finance
Tags: capital flows, Currency, dollar, financial stability, reserve currency, SIFIs, spillovers

Do capital controls deflect capital flows?

Paolo Giordani, Michele Ruta, Hans Weisfeld, Ling Zhu, 23 June 2014

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The size and volatility of capital flows to developing countries have increased significantly in recent years (Figure 1), leading many economists to argue that national policies and multilateral institutions are needed to govern these flows (Forbes and Klein 2013, Blanchard and Ostry 2012).

Topics: International finance
Tags: Brazil, capital controls, capital flows, Capital inflows, China, international capital flows, South Africa, spillovers

Spillovers from systemic bank defaults

Mark Mink, Jakob de Haan, 24 May 2014

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Financial-crisis management and prevention policies often focus on mitigating spillovers from the default of systemically important banks. During the recent crisis, governments avoided large bank failures by insuring and purchasing intermediaries’ troubled assets, by providing them with capital injections, and even by outright nationalisations.

Topics: Financial markets
Tags: banking, banks, financial stability, regulation, spillovers, systemic risk

The economic impact of inward FDI on the US

Theodore H. Moran, Lindsay Oldenski, 4 March 2014

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The US is the second-largest recipient of FDI in the world, behind China, and by far the largest target for FDI among OECD countries (OECD 2013). The numbers are large ($253 billion for the US), and the gap with the next-largest in the OECD is impressive ($63 billion for the UK and $62 billion for France in 2012).

Topics: Productivity and Innovation
Tags: FDI, multinationals, productivity, R&D, spillovers, US, wages

Overcoming the obstacles to international macro policy coordination is hard

Olivier Blanchard, Jonathan D Ostry, Atish R Ghosh, 20 December 2013

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International policy coordination is like the Loch Ness monster – much discussed but rarely seen. Going back over the decades, and even further in history to the period between the two world wars, coordination efforts have been episodic.

Topics: Macroeconomic policy
Tags: currency war, financial regulation, fiscal consolidation, policy coordination, spillovers, unconventional monetary policy

Multinationals assist domestic suppliers? Perhaps think again

Olivier N. Godart, Holger Görg, Christiane Krieger-Boden, 29 April 2013

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It is empirically well established that multinationals raise productivity levels of their local suppliers in their host countries. Firm-level data show that productivity of upstream industries is the higher the higher the importance of multinationals in downstream industries is (e.g. Javorcik 2004, Barrios et al. 2011).

Topics: Development, International finance, International trade
Tags: backward linkages, multinationals, spillovers

Beggar-thy-neighbours? Spillover effects of exchange rates

Aaditya Mattoo, Arvind Subramanian, Prachi Mishra, 23 March 2012

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Nearly all of the empirical research on exchange rates is focused on the impact of their changes on the country experiencing or undertaking them. This is true of the older, voluminous literature on the trade consequences of exchange rates (surveyed in Goldstein and Khan 1985), as well as more recent contributions like Rodrik (2008) and Berman et al. (2012).

Topics: Exchange rates
Tags: beggar-thy-neighbour, China, spillovers

Clustering together abroad: South Korean multinationals in China

Peter Debaere, Joon H. Lee , Myungho Paik, 3 June 2009

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Foreign direct investment has played a prominent role in the current wave of globalisation. The World Investment Report (UNCTAD, 2008) notes that total worldwide FDI flows in 2007 amounted to 1.8 trillion dollars. More than 25% of these flows were to developing economies.

Topics: International finance
Tags: agglomeration, foreign direct investment, spillovers

Economic spillovers from international environmental cooperation

Andrew K Rose, Mark M. Spiegel, 2 July 2008

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Successful international environmental agreements (IEAs) must meet two important criteria:1 (1) Countries must sign up voluntarily, and (2) the agreements must be self-enforcing, in the sense that members of an IEA must have the capacity and the willingness to respond to deviations by an individual or group of countries from the rules of the treaty.

Topics: Environment
Tags: capital flows, environmental agreements, spillovers

The lifecycle of regions

David B Audretsch, Oliver Falck, Maryann P. Feldman, Stephan Heblich, 29 April 2008

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The European Union spends a substantial fraction of its budget on regional policy with the goal of reducing inequality, particularly for those European regions hardest hit by unemployment and structural change. Designing regional policy, however, is not a simple matter.

Topics: Europe's nations and regions, Productivity and Innovation
Tags: cities, regional policy, spillovers

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