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The Real Effects of Financial Integration

Listed author(s):
  • Jean Imbs

    (Center for Economic Research - CEPR, HEC, Lausanne - Department of Economics)

This paper shows correlations in GDP fluctuations rise with financial integration. Finance serves to increase international correlations in both consumption and GDP fluctuations, which explains the persistent gap between the two in the data, a quantity puzzle. The positive association between financial integration and GDP correlation constitutes a puzzle, as theory suggests a negative relation if anything. Nevertheless, it prevails in the data even after the effects of finance on trade and specialization are accounted for.

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Paper provided by HAL in its series Post-Print with number hal-00612566.

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Length:
Date of creation: Mar 2006
Publication status: Published in Journal of International Economics, Elsevier, 2006, 68 (2), pp.296-324. <10.1016/j.jinteco.2005.05.003>
Handle: RePEc:hal:journl:hal-00612566
DOI: 10.1016/j.jinteco.2005.05.003
Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-00612566
Contact details of provider: Web page: https://hal.archives-ouvertes.fr/

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