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The Financial Crisis and The Geography of Wealth Transfers

In: Global Financial Crisis

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  • Pierre-Olivier Gourinchas
  • Hélène Rey
  • Kai Truempler

Abstract

This paper studies the geography of wealth transfers between 2007Q4 and 2008Q4, at the height of the global financial crisis. We construct valuation changes on bilateral external positions in equity, direct investment and portfolio debt to measure who benefited and who lost on their external exposure. We find a very diverse set of fortunes governed by the structure of countries' external portfolios. In particular, we are able to relate the gains and losses on debt portfolios to the country's exposure to ABS, ABCP conduits and the extent of dollar shortage.

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This chapter was published in:

  • Charles Engel & Kristin Forbes & Jeffrey Frankel, 2012. "Global Financial Crisis," NBER Books, National Bureau of Economic Research, Inc, number enge11-2, July.
    This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 13168.

    Handle: RePEc:nbr:nberch:13168

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    References

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    32. repec:spo:wpecon:info:hdl:2441/c8dmi8nm4pdjkuc9g81p7j6b6 is not listed on IDEAS
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    Cited by:
    1. Natalya Martynova & Lev Ratnovski & Razvan Vlahu, 2014. "Franchise value and risk-taking in modern banks," DNB Working Papers 430, Netherlands Central Bank, Research Department.
    2. Prasad, Eswar, 2011. "Role Reversal in Global Finance," IZA Discussion Papers 6032, Institute for the Study of Labor (IZA).
    3. Minoiu, Camelia & Reyes, Javier A., 2013. "A network analysis of global banking: 1978–2010," Journal of Financial Stability, Elsevier, vol. 9(2), pages 168-184.
    4. Carlos Hurtado, 2012. "The Euro Experience: A Review of the Euro Crisis, Policy Issues, Issues Going Forward and Policy Implications for Latin America," Research Department Publications 4786, Inter-American Development Bank, Research Department.
    5. Carol C. Bertaut & Fang Cai & Nyssa Kim, 2013. ""Fool Me Once . . . " Did U.S. investors play it safer in the European debt crisis?," International Finance Discussion Papers 1088, Board of Governors of the Federal Reserve System (U.S.).
    6. de la Torre, Augusto & Didier, Tatiana & Pinat, Magali, 2014. "Can Latin America tap the globalization upside ?," Policy Research Working Paper Series 6837, The World Bank.
    7. Philip Lane, 2013. "Financial Globalisation and the Crisis," Open Economies Review, Springer, vol. 24(3), pages 555-580, July.
    8. Tommaso Trani, 2012. "Funding under Borrowing Limits in International Portfolios," IHEID Working Papers 01-2012, Economics Section, The Graduate Institute of International Studies, revised 14 Feb 2012.

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