Resource title

Business Cycle Fluctuations and International Financial Integration

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Resource description

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.

Resource author

Renatas Kizys, Christian Pierdzioch

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Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/17740

Resource license

Adapt according to the presented license agreement and reference the original author.