The Macroeconomics of International Financial Trade
IIIS Discussion Paper No. 13
25 Pages Posted: 1 Jun 2005
Date Written: November 2003
A driving factor in any open-economy macroeconomics model is the degree of international financial integration. This suggests that understanding the sources of the recent explosive growth in cross-border asset trade and the impact of the upscaling in gross and net international investment positions on key open-economy macroeconomic variables such as the trade balance and the real exchange rate is critically important for policy analysis. Accordingly, the goal of this paper is to highlight some of the main results emerging from this fast-expanding research field.
Keywords: international financial integration, international macroeconomics integration, international asset trade
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