This is motivated by the dollar being an important funding currency for intermediaries, and by the fact that a large portion of portfolios worldwide are denominated in dollars. Country size, currency unions, and international asset. Rey is the author of the childrens books in the curious george series. The global financial cycle is not aligned with countries specific macroeconomic conditions. Journal of international economics vol 112, pages 1266. The world economic forum is an independent international organization committed to improving the state of the world by engaging business, political, academic and other leaders of society to shape global, regional and industry agendas. International channels of transmission of monetary. Journal of international economics 38th annual nber. Journal of international economics vol 65, issue 2. Can portfolio rebalancing explain the dynamics of equity. Using the url or doi link below will ensure access to this page indefinitely.
The ones marked may be different from the article in the profile. International financial adjustment by pierreolivier gourinchas. A fishery managers guidebook second edition edited by kevern l. The global financial cycle and monetary policy independence, federal reserve bank of kansas city economic policy symposium 20. Born to a teacher and an engineer she grew up in brioude in southcentral france she received a master of science degree in engineering economic systems from stanford university in 1994. The euro area faces three interlocking crises that together challenge the viability of the currency union. There is a global financial cycle in capital flows, asset prices and in credit growth. Exorbitant privilege and exorbitant duty ideasrepec. We apply a new approach to a new panel data set on bilateral gross crossborder equity flows between 14 countries, 198996. Us monetary policy shocks induce comovements in the international financial variables that characterize the global financial cycle. Reforming the international monetary system vox, cepr policy. While the resultant growth has been spectacular, it comes with hidden but.
Journal of international economics vol 118, pages 1468. Rey focuses her research on the determinants and consequences of financial trade and economic imbalances, the theory of financial crisis, and how the international monetary system is organized. India among most dollarized countries in terms of invoicingu. Home bias in open economy financial macroeconomics. The determinants of crossborder equity flows by richard. Beatrice weder di mauro received her doctorate in economics from the university of basel in 1991.
Total downloads of all papers by silvia mirandaagrippino. Hence flexible exchange rates are not enough to guarantee monetary autonomy in a world of. Helene rey born 1970 is a french economist who serves as professor at london business. The banking sector is modelled as operating under a valueatrisk var constraint, which can bind occasionally. Gourinchas, pierreolivier and rey, helene and sauzet, maxime, the. We present in appendix a a linebyline description of the database we use in this paper and in gourinchas and rey 2005. Helene rey is professor of economics at london business school. Pdf home bias in open economy financial macroeconomics. Committee on international economic policy and reform. After working as a lecturer at lse 19972000 she was assistant professor and later. The regulation of bank capital as a means of smoothing the credit cycle is a central element of forthcoming macro.
Rey was born as hans augusto reyersbach in 1989 in hamburg, germany. Asset markets in countries with more credit inflows are more sensitive to the global cycle. E5,f02,f33,g15 abstract there is a global financial cycle in capital flows, asset prices and in credit growth. Campbell, john cochrane, nicolas coeurdacier, emmanuel farhi, nicola fuchs. The center country of the international monetary system enjoys an gexorbitant privilege h that. Proceedingseconomic policy symposiumjackson hole, 20.
Jan 17, 2018 reconciling risk sharing with market discipline. Prior to joining the faculty of johannesgutenberg university in 2001, she was an economist at the international monetary fund imf. External adjustment, global imbalances, valuation effects. Journal of international economics 39th annual nber. This cycle comoves with the vix, a measure of uncertainty and risk aversion of the markets. The global financial and monetary system in 2030 weforum.
We compute an investorlevel valueatrisk var measure our proxy for exante riskiness from a structural model with stochastic volatility that we estimate. Helene reys research focuses on international macroeconomics and finance with special emphasis on financial stability, international capital flows, exchange rates and the international monetary system. Rey gratefully acknowledges the european research council grant number 210584 on countries. Helene rey agenda contributor world economic forum. Incorporated as a notforprofit foundation in 1971, and headquartered in geneva, switzerland, the forum is tied to no political, partisan or national interests. Can portfolio rebalancing explain the dynamics of equity returns, equity flows, and exchange rates. Journal of international economics 40th annual nber international. Journal of international economics 40th annual nber. Committee on international economic policy and reform lead authors. International channels of transmission of monetary policy. The remarkably good results have strong implications for theories of asset trade. Financial flows and the international monetary system by. This cited by count includes citations to the following articles in scholar. Home bias in open economy financial macroeconomics by nicolas coeurdacier and helene rey.
Asset pricing, economic fluctuations and growth, international finance and macroeconomics. The internationalization of the rmb, capital market. Financial flows and the international monetary system helene rey. Evgenia and rey, helene, financial flows and the international monetary system may 2015. Economics in the time of covid19 edited by richard baldwin and beatrice weder di mauro a cepr press ebook cepr press the views expressed in this. Finally, in chapter 3, helene rey and jeromin zettelmeyer. Monetary policy in the capitals of capital, journal of the european economic. Us external adjustment and the exorbitant privilege, nber working papers 11563, national bureau of economic research, inc.
The paper proposes a unified framework to study the dynamics of net foreign assets and exchange rate movements. Twoday araku utsav off to a colourful start in vizag. Hassan is with university of chicago, nber, and cepr. Financial cycles with heterogeneous intermediaries 2020 global portfolio rebalancing and exchange rates 2020. Home bias is a perennial feature of international capital markets. This publication, written by a group of independent french and german economists, proposes six reforms which, if delivered as a package, would improve the eurozones financial stability, political cohesion, and potential for delivering prosperity to its citizens, all while addressing the priorities. Pdf the emergence of the euro as an international currency. Cochrane chief of the fisheries management and conservation service fisheries and aquaculture department, fao rome, italy serge m. Ds from ecole des hautes etudes en sciences sociales and london school of economics, both in 1998. Asset pricing, international finance and macroeconomics, monetary economics.
Current account, and the dollar brookings papers on economic activity, 2005, no. We have received helpful comments from senay agca, mark aguiar, philippe bacchetta, matt billett, fernando broner, eduardo fernandez. Sep, 2011 in this report, the committee on international economic policy and reform lays out a framework for rethinking central banking in light of lessons learned in the leadup to and aftermath of the. The global financial cycle and monetary policy independence helene rey introduction if one looks at the evolution of financial integration over the past half. The emergence of the euro as an international currency. Home bias in open economy financial macroeconomics american.
Portes, richard and rey, helene, the determinants of crossborder equity flows september 1999. Emmanuel farhi, pierreolivier gourinchas, helene rey. This lecture argues that the global financial cycle is a challenge for the validity of the mundellian trilemma. International financial adjustment by pierreolivier. One global factor explaining an important share of the variation of risky asset prices around the world decreases significantly after a us monetary contraction.
Market interest rates, credit default swap, exchange markets, interest parity, currency swaps, transaction costs, search frictions, information rents, rfq platforms, rfq, midprice, counterparties, price adjustment, price discrimination. Exorbitant privilege and exorbitant duty gourinchas, p. Economics in the time of covid19 edited by richard baldwin and beatrice weder di mauro a cepr press ebook cepr press the views expressed in this book are those of the authors and not those of cepr. Monetary tightening in the us leads to significant deleveraging of global financial. Isom, a project of the national bureau of economic research, brings together american and european economists in a different european city each june. We find strong evidence of a sizeable excess return of gross assets over gross liabilities. Garcia former director of the fao fisheries and aquaculture management division fisheries and aquaculture department, fao rome, italy published by.
Published in volume 51, issue 1, pages 63115 of journal of economic literature, march 20, abstract. China had been a prime example of exported growth, benefiting from learning by doing, and by adopting foreign knowhow, supported by a complex industrial policy. Jan 17, 2018 beatrice weder di mauro received her doctorate in economics from the university of basel in 1991. We show that deteriorations in a countrys net exports or net foreign asset position have to be matched either by future net export growth trade adjustment channel or by future increases in the returns of the net foreign asset portfolio hitherto unexplored financial. Exorbitant privilege and exorbitant duty, imes discussion paper series 10e20, institute for monetary and economic studies, bank of japan. The international monetary and financial system pierreolivier gourinchas, helene rey, maxime sauzet. The global financial cycle and monetary policy independence, nber working papers 21162, national bureau of economic research, inc. May 18, 2015 financial flows and the international monetary system. Oct 18, 2018 this issue is a selection of papers presented at the 40th annual meeting of isom, the international seminar on macroeconomics. Helene rey s research focuses on international macroeconomics and finance with special emphasis on financial stability, international capital flows, exchange rates and the international monetary system. Through her research, she has shown that certain countries different different gross external asset positions help them predict future financial. This material is based upon work supported by the european research council grant number 210584 on countries external balance sheets, dynamics of international adjustment and capital flows. Monetary policy in the capitals of capital helene rey official.
Helene rey professor of economics london business school. The international monetary and financial system by pierre. Moreover, the pattern of total net capital inflows to developing countries stands also in contradiction with the basic theory. We update and improve the gourinchas and rey 2007a dataset of the historical evolution of us external assets and liabilities at market value since 1952 to include the recent crisis period.
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