Financial Flows and the International Monetary System
We review the findings of the literature on the benefits of international financial flows and find that they are quantitatively elusive. We then present evidence on the existence of a global cycle in gross cross border flows, asset prices and leverage and discuss its impact on monetary policy autonomy across different exchange rate regimes. We focus in particular on the effect of US monetary policy shocks on the UK's financial conditions.
Sargan Lecture, Royal Economic Society (2014). Rey gratefully acknowledges financial support from the European Research Council (Grant 210584). We thank the editor Morten Ravn for comments. We are very grateful to Elena Gerko, Silvia Miranda Agrippino, Nicolas Coeurdacier, Pablo Winant, Xinyuan Li, Richard Portes and Jay Shambaugh for discussions. We also heartfully thank Peter Karadi and Mark Gertler for sharing their instruments. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Evgenia Passari & Hélène Rey, 2015. "Financial Flows and the International Monetary System," Economic Journal, Royal Economic Society, vol. 0(584), pages 675-698, 05. citation courtesy of