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The Macroeconomics of International Financial Trade

Philip R. Lane IIIS Discussion Paper No. 13

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.

Keywords : international financial integration, international macroeconomics integration, international asset trade.

Last updated 28 August 2014 by IIIS (Email).