Kiel Working Papers, Kiel Institute for World Economics
No 1197:
Business Cycle Fluctuations and International Financial Integration
Renatas Kizys and Christian Pierdzioch
Abstract: Theoretical research on the determinants of business-cycle
fluctuations implies that the degree of international financial integration
can have important implications for the propagation of, e.g., macroeconomic
policy shocks in an open economy. An important assumption underlying this
research is that the degree of financial integration can be taken as
exogenously given. Because recent empirical research has demonstrated that
financial integration may change over time, we use data for the G7
countries to test how well this assumption fits to the data. We find that
one can maintain, as a rule, the assumption that the degree of financial
integration is invariant to the determinants of the business-cycle
fluctuations. We find, however, a few exceptions from this rule, and we
also find that shocks tend to have a highly persistent effect on financial
integration.
Keywords: Open economy macroeconomics; Business cycles; Financial integration; (follow links to similar papers)
JEL-Codes: F33,; F36,; F41; (follow links to similar papers)
40 pages, January 2004
Before downloading any of the electronic versions below
you should read our statement on
copyright.
Download GhostScript
for viewing Postscript files and the
Acrobat Reader for viewing and printing pdf files.
Downloadable files:
kap1197.pdf
Download Statistics
Report other problems with accessing this service to Sune Karlsson ()
or Helena Lundin ().
Programing by
Design Joakim Ekebom