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Financial Frictions, Financial Integration and the International Propagation of Shocks

Author

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  • Giovanni Lombardo

    (European Central Bank)

  • Luca Dedola

    (European Central Bank and CEPR)

Abstract

risky assets, if asset markets are integrated across the board, reflecting a strong pressure towards the cross-border equalization of external finance premia faced by levered investors. In turn, the resulting global flight to quality may bring about tight international linkages in (de-)leveraging, financial and macroeconomic dynamics.

Suggested Citation

  • Giovanni Lombardo & Luca Dedola, 2010. "Financial Frictions, Financial Integration and the International Propagation of Shocks," 2010 Meeting Papers 288, Society for Economic Dynamics.
  • Handle: RePEc:red:sed010:288
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    References listed on IDEAS

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    Cited by:

    1. Kollmann, Robert & Enders, Zeno & Müller, Gernot J., 2011. "Global banking and international business cycles," European Economic Review, Elsevier, vol. 55(3), pages 407-426, April.
    2. Bacchetta, Philippe & van Wincoop, Eric, 2013. "Sudden spikes in global risk," Journal of International Economics, Elsevier, vol. 89(2), pages 511-521.
    3. Eric van Wincoop, 2013. "International Contagion through Leveraged Financial Institutions," American Economic Journal: Macroeconomics, American Economic Association, vol. 5(3), pages 152-189, July.
    4. Malamud, Semyon & Malkhozov, Aytek, 2016. "Market Integration and Global Crashes," CEPR Discussion Papers 11468, C.E.P.R. Discussion Papers.
    5. Philip R. Lane, 2011. "External Imbalances and Macroeconomic Policy in New Zealand," The Institute for International Integration Studies Discussion Paper Series iiisdp376, IIIS.
    6. Kalemli-Ozcan, Sebnem & Papaioannou, Elias & Perri, Fabrizio, 2013. "Global banks and crisis transmission," Journal of International Economics, Elsevier, vol. 89(2), pages 495-510.
    7. Philip R. Lane, 2013. "External imbalances and macroeconomic policy," New Zealand Economic Papers, Taylor & Francis Journals, vol. 47(1), pages 53-70, April.

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    JEL classification:

    • G0 - Financial Economics - - General

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