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Medium-Term Determinants Of International Investment Positions: The Role Of Structural Policies

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  • DAVIDE FURCERI

    ()
    (International Monetary Fund, University of Palermo, IMF, 700 19th Street, N.W., Washington, DC 20431, USA)

  • STÉPHANIE GUICHARD

    ()
    (OECD, 2 rue André-Pascal, 75775 Paris CEDEX 16, France)

  • ELENA RUSTICELLI

    ()
    (OECD, 2 rue André-Pascal, 75775 Paris CEDEX 16, France)

Abstract

This paper provides an empirical investigation of the medium-term determinants of international investment positions for a large sample of advanced and emerging economies. In addition to the usually considered drivers of foreign assets and liabilities, the analysis focuses on the role of structural policy indicators. Using cross-section and panel regression techniques the results suggest that structural policy settings are important medium-term drivers of capital flows, having a relatively large impact on gross and net foreign capital positions and on their composition. In particular, the results suggest that certain kinds of structural policy reform could help to narrow global imbalances, and to modify the composition of international capital flows towards more stable and productive sources.

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Bibliographic Info

Article provided by World Scientific Publishing Co. Pte. Ltd. in its journal Journal of International Commerce, Economics and Policy.

Volume (Year): 03 (2012)
Issue (Month): 02 ()
Pages: 1250012-1-1250012-32

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Handle: RePEc:wsi:jicepx:v:03:y:2012:i:02:p:1250012-1-1250012-32

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Related research

Keywords: Capital flows; structural policies; global imbalances; JEL Classifications: F21; JEL Classifications: E6;

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References

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  1. Koralai Kirabaeva & Assaf Razin, 2010. "Composition of Capital Flows: A Survey," NBER Working Papers 16492, National Bureau of Economic Research, Inc.
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  5. Mahir Binici & Michael M. Hutchison & Martin Schindler, 2009. "Controlling Capital? Legal Restrictions and the Asset Composition of International Financial Flows," IMF Working Papers 09/208, International Monetary Fund.
  6. Maurice Obstfeld & Kenneth Rogoff, 2000. "The Six Major Puzzles in International Macroeconomics: Is There a Common Cause?," NBER Working Papers 7777, National Bureau of Economic Research, Inc.
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  11. Dana Hajkova & Giuseppe Nicoletti & Laura Vartia & Kwang-Yeol Yoo, 2006. "Taxation, Business Environment and FDI Location in OECD Countries," OECD Economics Department Working Papers 502, OECD Publishing.
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Citations

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Cited by:
  1. Dong He & Lillian Cheung & Wenlang Zhang & Tommy Wu, 2012. "How would Capital Account Liberalisation Affect China's Capital Flows and the Renminbi Real Exchange Rates?," Working Papers 092012, Hong Kong Institute for Monetary Research.
  2. Davide Furceri & Stéphanie Guichard & Elena Rusticelli, 2011. "Episodes of Large Capital Inflows and the Likelihood of Banking and Currency Crises and Sudden Stops," OECD Economics Department Working Papers 865, OECD Publishing.
  3. Zsolt Darvas, 2012. "Intra-euro rebalancing is inevitable but insufficient," Policy Contributions 747, Bruegel.
  4. Davide Furceri & Stéphanie Guichard & Elena Rusticelli, 2011. "The Effect of Episodes of Large Capital Inflows on Domestic Credit," OECD Economics Department Working Papers 864, OECD Publishing.
  5. Stefan Huemer & Beatrice Scheubel & Florian Walch, 2013. "Measuring Institutional Competitiveness in Europe," CESifo Economic Studies, CESifo, vol. 59(3), pages 576-608, September.

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