Financial and Real Integration
FRB Atlanta Working Paper No. 2008-14
35 Pages Posted: 29 May 2008
Date Written: May 1, 2008
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: Suggested Citation