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The Macroeconomics of International Financial Trade

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  • Philip Lane

Abstract

A driving factor in any open-economy macroeconomics model is the degree of international financial integration. This suggests that understanding the sources of the recent explosive growth in cross-border asset trade and the impact of the upscaling in gross and net international investment positions on key open-economy macroeconomic variables such as the trade balance and the real exchange rate is critically important for policy analysis. Accordingly, the goal of this paper is to highlight some of the main results emerging from this fast-expanding research field.

Suggested Citation

  • Philip Lane, 2003. "The Macroeconomics of International Financial Trade," The Institute for International Integration Studies Discussion Paper Series iiisdp013, IIIS.
  • Handle: RePEc:iis:dispap:iiisdp013
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    2. Maurice Obstfeld & Kenneth S. Rogoff, 2000. "Perspectives on OECD economic integration : implications for U.S. current account adjustment," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 169-208.
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    4. Lane, Philip R. & Milesi-Ferretti, Gian Maria, 2002. "External wealth, the trade balance, and the real exchange rate," European Economic Review, Elsevier, vol. 46(6), pages 1049-1071, June.
    5. Bent E. S�rensen & Oved Yosha, 1998. "International Risk Sharing and European Monetary Unification," Temi di discussione (Economic working papers) 327, Bank of Italy, Economic Research and International Relations Area.
    6. Michael B. Devereux & Philip R. Lane & Juanyi Xu, 2006. "Exchange Rates and Monetary Policy in Emerging Market Economies," Economic Journal, Royal Economic Society, vol. 116(511), pages 478-506, April.
    7. Gian Maria Milesi-Ferretti, & Philip R. Lane, 2003. "International Financial Integration," The Institute for International Integration Studies Discussion Paper Series iiisdp03, IIIS.
    8. Pierpaolo Benigno, 2009. "Price Stability with Imperfect Financial Integration," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 41(s1), pages 121-149, February.
    9. Philip R. Lane & Gian Maria Milesi-Ferretti, 2004. "The Transfer Problem Revisited: Net Foreign Assets and Real Exchange Rates," The Review of Economics and Statistics, MIT Press, vol. 86(4), pages 841-857, November.
    10. Lane, P.R. & Ganelli, G., 2002. "Dynamic General Equilibrium Analysis: The Open Economy Dimension," CEG Working Papers 20026, Trinity College Dublin, Department of Economics.
    11. Pierre-Olivier Gourinchas & Olivier Jeanne, 2006. "The Elusive Gains from International Financial Integration," Review of Economic Studies, Oxford University Press, vol. 73(3), pages 715-741.
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    13. Peter J. Buckley (ed.), 1990. "International Investment," Books, Edward Elgar Publishing, number 533.
    14. Philip R. Lane, 2000. "International Diversification and the Irish Economy," The Economic and Social Review, Economic and Social Studies, vol. 31(1), pages 37-53.
    15. Philip R. Lane & Gian Maria Milesi-Ferretti, 2008. "International Investment Patterns," The Review of Economics and Statistics, MIT Press, vol. 90(3), pages 538-549, August.
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    17. Heathcote, Jonathan & Perri, Fabrizio, 2004. "Financial globalization and real regionalization," Journal of Economic Theory, Elsevier, vol. 119(1), pages 207-243, November.
    18. Philip R. Lane & Gian Maria Milesi-Ferretti, 2002. "Long-Term Capital Movements," NBER Chapters, in: NBER Macroeconomics Annual 2001, Volume 16, pages 73-136, National Bureau of Economic Research, Inc.
    19. Albuquerque, Rui, 2003. "The composition of international capital flows: risk sharing through foreign direct investment," Journal of International Economics, Elsevier, vol. 61(2), pages 353-383, December.
    20. Mr. Gian M Milesi-Ferretti & Mr. Philip R. Lane, 2004. "International Investment Patterns," IMF Working Papers 2004/134, International Monetary Fund.
    21. Lane, Philip R., 2000. "International investment positions: a cross-sectional analysis," Journal of International Money and Finance, Elsevier, vol. 19(4), pages 513-534, August.
    22. Philip R. Lane, 2003. "Business Cycles and Macroeconomic Policy in Emerging Market Economies," International Finance, Wiley Blackwell, vol. 6(1), pages 89-108, March.
    23. Frankel, Jeffrey A. & Rose, Andrew K., 1995. "Empirical research on nominal exchange rates," Handbook of International Economics, in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 33, pages 1689-1729, Elsevier.
    24. Cedric Tille, 2003. "The impact of exchange rate movements on U.S. foreign debt," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 9(Jan).
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    Cited by:

    1. Vo, Xuan Vinh & Daly, Kevin James, 2007. "The determinants of international financial integration," Global Finance Journal, Elsevier, vol. 18(2), pages 228-250.
    2. Philip Lane, 2007. "The Swedish external position and the krona," International Economics and Economic Policy, Springer, vol. 4(3), pages 263-279, November.

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    Law; EC; WTO; Subsidies; State Aid; Governance; Private Parties.;
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