International Finance and Income Convergence : Europe is Different / Daniel Leigh, Abdul Abiad, Ashoka Mody.

Format:

Book

Government document

Author/Creator:

Leigh, Daniel.

Contributor:

Abiad, Abdul.

Mody, Ashoka.

Series:

IMF Working Papers; Working Paper ; No. 2007/064

IMF Working Papers

Language:

English

Subjects (All):

Income--Europe.

Income.

International finance.

Physical Description:

1 online resource (38 p.)

Place of Publication:

Washington, D.C. : International Monetary Fund, 2007.

Language Note:

English

Summary:

Recent studies conclude that the ongoing global financial integration may have had little or no value in advancing economic growth, especially in poor countries. Capital is often found to flow "uphill" from poor to rich countries. And, when it does flow into the less developed economies, it is negatively correlated with growth, calling into question the desirability of foreign capital. In this paper we report that Europe-including the new member states of the European Union-provides a counterexample to these global anomalies. With increasing financial integration, capital in Europe has traveled "downhill" from rich to poor countries, and has done so with gathering strength. These inflows have been associated with significant acceleration of income convergence.

Contents:

Contents; I. Introduction; Figures; 1. Financial Integration in Different Regions of the World, 1994-2004; 2. Emerging Markets: Current Account Balance, 1998-2005; II. Current Accounts and the Role of Financial Integration; Tables; 1. Average Cross-border Portfolio Holdings of Long Term Debt, 2001-03; 3. Europe: Financial Integration, 1975-2004; A. Empirical Approach; 4. Europe: Dispersion of Current Account Balances, 1975-2005; B. Estimation Results; 2. Benchmark Current Account Regressions, Global and European Samples

5. Europe: Coefficients on Output per Capita over Time for the Observed Range of Financial Integration6. Current Account Isoquants as a Function of Income and Financial Integration; 3. Europe: What has Strengthened the CA-Income Link? Financial Integration vs. Other "Enabling Mechanisms"; III. The Impact of Current Accounts on Growth; A. Empirical Methodology; B. Estimation Results; 4. Benchmark Growth Regression, Global and European Samples; 7. "Unconditional" Convergence in Europe: Growth vs. Per-Capita GDP, 1975-2004; 5. Europe: Foreign Savings' Effect on Growth, at Different Lags

8. Growth Isoquants as a Function of Income and Current Account Deficit9. Europe: Convergence Parameter and Half Life over the Observed CurrentAccount Deficit Range; 6. Europe: The Channels Through Which Foreign Savings Affect Growth; 7. Europe: The Channels Through Which FDI and Non-FDI Flow Affect Growth; 8. The Impact of Domestic vs. Foreign Finance on Growth, Global and European Samples; IV. Conclusions; References; Data Appendix; Appendix Tables; 1. Europe: Benchmark Current Account Regression, at Different Horizons

2. Robustness Check 2. Using a Price-Based Measure of Financial IntegrationAppendix Figures; 1. Europe: Predicted and Actual Current Accounts, 1975-2004; 2. Europe: Predicted and Actual Growth, 1975-2004; 3. Robustness to Dropping One Country at a Time

Notes:

"March 2007."

Includes bibliographical references.

Description based on print version record.

ISBN:

9786613827920

9781462380053

1462380050

9781451990348

1451990340

9781283515474

1283515474

9781451910810

1451910819