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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. Maurice Obstfeld & Kenneth Rogoff, 2001. "The Six Major Puzzles in International Macroeconomics: Is There a Common Cause?," NBER Chapters, National Bureau of Economic Research, Inc, in: NBER Macroeconomics Annual 2000, Volume 15, pages 339-412 National Bureau of Economic Research, Inc.
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Cited by:
  1. Furceri, Davide & Guichard, Stéphanie & Rusticelli, Elena, 2012. "The effect of episodes of large capital inflows on domestic credit," The North American Journal of Economics and Finance, Elsevier, Elsevier, vol. 23(3), pages 325-344.
  2. Dong He & Lillian Cheung & Wenlang Zhang & Tommy Wu, 2012. "How would Capital Account Liberalization Affect China's Capital Flows and the Renminbi Real Exchange Rates?," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 20(6), pages 29-54, November.
  3. Stefan Huemer & Beatrice Scheubel & Florian Walch, 2013. "Measuring Institutional Competitiveness in Europe," CESifo Economic Studies, CESifo, CESifo, vol. 59(3), pages 576-608, September.
  4. Zsolt Darvas, 2012. "Intra-euro rebalancing is inevitable but insufficient," Policy Contributions, Bruegel 747, Bruegel.
  5. 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.

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