International Financial Integration
Philip R. Lane
Trinity College (Dublin) - Department of Economics; Centre for Economic Policy Research (CEPR)
Gian Maria Milesi-Ferretti
International Monetary Fund (IMF); National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)
IMF Working Paper No. 03/86
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.
Number of Pages in PDF File: 45
Keywords: International investment position, rates of return
JEL Classification: F31, F32
Date posted: January 29, 2006
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