scholarly journals Financial Integration, Financial Development, and Global Imbalances

2009 ◽  
Vol 117 (3) ◽  
pp. 371-416 ◽  
Author(s):  
Enrique G. Mendoza ◽  
Vincenzo Quadrini ◽  
José‐Víctor Ríos‐Rull
Keyword(s):  
Financial Development ◽  
Financial Integration ◽  
Global Imbalances

Financial Integrational Effects on Macroeconomic Instability in India

2017 ◽  
Vol 11 (2) ◽  
pp. 143-166
Author(s):  
Niranjan R.
Keyword(s):  
Financial Development ◽  
Financial Integration ◽  
Trade Openness ◽  
Jel Classification ◽  
Financial Openness ◽  
Vector Error Correction ◽  
Vector Error ◽  
International Financial Integration ◽  
Macroeconomic Instability ◽  
Negative Effect

The nexus between international financial integration and economic growth continues to be one of the most debated issues among macroeconomists, and these debates often raise several issues from the theoretical and policy perspectives. Financial integration can catalyse financial development, improve governance and impose discipline on macro-policies. However, in the absence of a basic pre-existing level of supporting conditions, financial integration can aggravate instability (Khadraoui, 2010). In addition, economic theory suggests that increased financial openness intensifies macroeconomic instability. This article investigates the financial integrational effects on macroeconomic instability in terms of output, consumption and investment volatility by employing the vector error correction model (VECM) with empirically reasonably parameters for an emerging economy, India, for the period 1989–2014. From the results, it is evident that financial openness has had a significant effect on output, consumption and investment volatility. Financial development has had a statistically significant negative effect on output, consumption and investment volatility. Similarly, trade openness and terms of trade significantly influence output, consumption and investment volatility. JEL Classification: F36, F41, F43, E32

Global Imbalances, Productivity Differentials, and Financial Integration

2009 ◽  
Vol 56 (3) ◽  
pp. 655-682 ◽  
Author(s):  
Suparna Chakraborty ◽  
Robert Dekle
Keyword(s):  
Financial Integration ◽  
Global Imbalances ◽  
Productivity Differentials

What Do We Know About Global Financial Crises? Putting IPE and Economics in Conversation

2017 ◽  
Author(s):  
Michael J. Lee
Keyword(s):  
Financial Crises ◽  
Financial Integration ◽  
International Political Economy ◽  
Economic Thought ◽  
International Economy ◽  
Global Imbalances ◽  
Natural Experiments ◽  
Financial Flows ◽  
Access To Credit ◽  
Credit Booms

Since the 1970s, financial crises have been a consistent feature of the international economy, warranting study by economists and political scientists alike. Economists have made great strides in their understanding of the dynamics of crises, with two potentially overlapping stories rising to the fore. Global crises appear to occur highly amid global imbalances—when some countries run large current account deficits and others, large surpluses. A second story emphasizes credit booms—financial institutions greatly extend access to credit, potentially leading to bubbles and subsequent crashes. Global imbalances are, in part, the product of politically contested processes. Imbalances would be impossible if states did not choose to liberalize (or not to liberalize) their capital accounts. Global political structures—whether international institutions seeking to govern financial flows, or hierarchies reflecting an economic power structure among states—also influence the ability of the global system to resolve global imbalances. Indeed, economists themselves are increasingly finding evidence that the international economy is not a flat system, but a network where some states play larger roles than others. Credit booms, too, and the regulatory structures that produce them, result from active choices by states. The expansion of the financial sector since the 1970s, however, took place amid a crucible of fire. Financial deregulation was the product of interest group knife-fights, states’ vying for position or adapting to technological change, and policy entrepreneurs’ seeking to enact their ideas. The IPE (international political economy) literature, too, must pay attention to post-2008 developments in economic thought. As financial integration pushes countries to adopt the monetary policies of the money center, the much-discussed monetary trilemma increasingly resembles a dilemma. Whereas economists once thought of expanded access to credit as “financial development,” they increasingly lament the preponderance of “financialized” economies. While the experimentalist turn in political science heralded a great search for cute natural experiments, economists are increasingly turning to the distant past to understand phenomena that have not been seen for some time. Political scientists might benefit from returning to the same grand theory questions, this time armed with more rigorous empirical techniques, and extensive data collected by economic historians.

scholarly journals The Impact of the Financial Crisis on Financial Integration, Growth and Investment

2012 ◽  
Vol 220 ◽  
pp. R29-R35 ◽  
Author(s):  
Robert Inklaar ◽  
Juan Fernández de Guevara ◽  
Joaquín Maudos
Keyword(s):  
Financial Crisis ◽  
Financial Development ◽  
Financial Crises ◽  
Financial Integration ◽  
Economic Cost ◽  
Uncertainty Aversion ◽  
The Past ◽  
Regulatory Changes ◽  
The Impact ◽  
European Financial Integration

Financial crises, and in particular those of the past few years, have severe consequences for the affected economies. In this paper we analyse the impact of financial development and European financial integration on growth and we find no reversal of the growth benefits of financial development and integration in recent years. This highlights the economic cost of regulatory changes that would reverse European financial integration. We also find that, following a financial crisis, investment declines more in countries with a greater degree of uncertainty aversion, which can be informative for evaluating post-crisis economic performance.

Financial Integration and Financial Development in East Asia

2014 ◽  
Vol 5 (1) ◽  
pp. 1-22 ◽  
Author(s):  
Inderjit Kaur ◽  
Nirvikar Singh
Keyword(s):  
East Asia ◽  
Financial Development ◽  
Financial Integration

scholarly journals Examining the relationship between finance, institutions and economic growth: evidence from the ASEAN economies

2019 ◽  
Vol 53 (4) ◽  
pp. 519-542 ◽  
Author(s):  
Hazwan Haini
Keyword(s):  
Economic Growth ◽  
Financial Markets ◽  
Financial Development ◽  
Financial Institutions ◽  
Financial Integration ◽  
Institutional Quality ◽  
Institutional Development ◽  
Positive Role ◽  
Asean Economic Community ◽  
Dynamic Panel Estimator

AbstractThis study investigates the role of financial and institutional development on economic growth in the Association of Southeast Asian Nations (ASEAN) economies from 1995 to 2017 using a dynamic panel estimator. Financial development is instrumental in promoting economic growth; however, the effect of financial institutions and financial markets can differ. In recent years, the ASEAN economies have launched financial and institutional integration initiatives towards the goal of an integrated ASEAN Economic Community, which can have a profound impact on economic growth. The estimated results show that financial institutions are positive and significant towards economic growth, while financial markets are insignificant. Equally important, institutional quality plays a significant and positive role in economic growth. More interestingly, the study finds that institutional development is complementary to financial institutions and markets. Member states should emphasise on further financial integration across the ASEAN economies, allowing for the development of financial institutions and markets alongside improvements in institutional quality to increase the effectiveness of financial development.

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