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The Financial Crisis and the Geography of Wealth Transfers

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  • Gourinchas, Pierre-Olivier
  • Rey, Hélène
  • Truempler, Kai Alexander

Abstract

This paper studies the geography of wealth transfers during the 2008 global financial crisis. We construct valuation changes on bilateral external positions in equity, direct investment and portfolio debt at the height of the crisis to map 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 ABCP conduits and the extent of dollar shortage.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 8567.

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Date of creation: Sep 2011
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Handle: RePEc:cpr:ceprdp:8567

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Keywords: global financial crisis; international monetary system; reserve currency; valuation effects;

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Citations

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Cited by:
  1. 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.
  2. 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.
  3. Philip R. Lane, 2012. "Financial Globalisation and the Crisis," BIS Working Papers 397, Bank for International Settlements.
  4. 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.).
  5. Prasad, Eswar, 2011. "Role Reversal in Global Finance," IZA Discussion Papers 6032, Institute for the Study of Labor (IZA).
  6. 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.
  7. Natalya Martynova & Lev Ratnovski & Razvan Vlahu, 2014. "Franchise value and risk-taking in modern banks," DNB Working Papers 430, Netherlands Central Bank, Research Department.
  8. 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.

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