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Financial and Real Integration

FRB Atlanta Working Paper No. 2008-14

35 Pages Posted: 29 May 2008  

Scott L. Baier

Clemson University - John E. Walker Department of Economics

Gerald P. Dwyer

Clemson University; Australian National University (ANU) - Centre for Applied Macroeconomic Analysis (CAMA)

Date Written: May 1, 2008

Abstract

We examine the relationship between real and financial integration. Real integration is measured by productivities of capital and labor from trade data for 1982 to 1997. Financial integration is measured by the black market exchange rate. We find more evidence of convergence to equality for returns to capital than for returns to labor. There is some support for associating the convergence of black market premia with declines in black market premia.

Keywords: financial integration, factor-market integration, trade productivities, black market exchange rates

JEL Classification: F15, F36

Suggested Citation

Baier, Scott L. and Dwyer, Gerald P., Financial and Real Integration (May 1, 2008). FRB Atlanta Working Paper No. 2008-14. Available at SSRN: https://ssrn.com/abstract=1138255 or http://dx.doi.org/10.2139/ssrn.1138255

Scott Leonard Baier

Clemson University - John E. Walker Department of Economics ( email )

Clemson, SC 29634
United States
864-656-4534 (Phone)

Gerald P. Dwyer (Contact Author)

Clemson University ( email )

Department of Economics
Clemson University
Clemson, SC 29634
United States

Australian National University (ANU) - Centre for Applied Macroeconomic Analysis (CAMA) ( email )

ANU College of Business and Economics
Canberra, Australian Capital Territory 0200
Australia

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