Bank of England
Institutional Affiliation: Paris School of Economics
Information about this author at RePEc
NBER Working Papers and Publications
|December 2015||Financial Integration and Growth in a Risky World|
with Nicolas Coeurdacier, Hélène Rey: w21817
The debate on the benefits of financial integration is revisited in a two-country neoclassical growth model with aggregate uncertainty. Gains from more efficient capital allocation and gains from risk sharing are accounted for simultaneously|together with their interaction. Global numerical methods allow for meaningful welfare comparisons. Gains from integration are quantitatively small, even for riskier and capital scarce emerging economies. These countries import capital for efficiency reasons before exporting it for self-insurance, leading to capital ows and growth reversals along the transition. This opens the door to a richer set of empirical implications than previously considered in the literature.
Published: Nicolas Coeurdacier & Héléne Rey & Pablo Winant, 2019. "Financial Integration and Growth in a Risky World," Journal of Monetary Economics, .