nep-ifn New Economics Papers
on International Finance
Issue of 2021‒12‒06
two papers chosen by
Vimal Balasubramaniam
University of Oxford

  1. What Types of Capital Flows Help Improve International Risk Sharing? By Ergys Islamaj; M. Ayhan Kose
  2. Cross-Border Currency Exposures. New evidence based on an enhanced and updated dataset. By Agustin S. Benetrix; Deepali Gautam; Luciana Juvenal; Martin Schmitz

  1. By: Ergys Islamaj (World Bank); M. Ayhan Kose (World Bank, Brookings Institution, CAMA, and CEPR)
    Abstract: Cross-border capital flows are expected to lead to increased international risk sharing by facilitating borrowing and lending in global financial markets. This paper examines risk-sharing outcomes of various types of capital flows (foreign direct investment, portfolio equity, debt, remittance, and aid flows) in a large sample of emerging market and developing economies. The results suggest that remittances and aid flows are associated with increased international risk sharing. Other types of capital flows are not consistently correlated with better risk-sharing outcomes. These findings are robust to the use of different econometric specifications, country-specific characteristics, and other controls.
    Keywords: Capital flows; remittances; aid flows, international risk sharing.
    JEL: E1 F02 F4 G01
    Date: 2021–11
  2. By: Agustin S. Benetrix (Department of Economics, Trinity College Dublin); Deepali Gautam (International Monetary Fund); Luciana Juvenal (International Monetary Fund); Martin Schmitz (European Central Bank)
    Abstract: This paper provides a dataset on the currency composition of the international investment position for a group of 50 countries for the period 1990-2017. It improves available data based on estimates by incorporating actual data reported by statistical authorities and refining estimation methods. The paper illustrates current and new uses of these data, with particular focus on the evolution of currency exposures of cross-border positions.
    Keywords: currency composition, foreign currency exposures
    JEL: F20 F31 F41
    Date: 2020–01

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