International financial remoteness and macroeconomic volatility

Andrew Rose () and Mark M Spiegel ()

Journal of Development Economics, 2009, vol. 89, issue 2, pages 250-257

Abstract: This paper shows that proximity to major international financial centers seems to reduce business cycle volatility. In particular, we show that countries that are farther from major locations of international financial activity systematically experience more volatile growth rates in both output and consumption, even after accounting for political institutions, trade, and other controls. Our results are relatively robust in the sense that more financially remote countries are more volatile, though the results are not always statistically significant. The comparative strength of this finding is in contrast to the more ambiguous evidence found in the literature.

Keywords: Empirical; Data; Cross-section; Business; cycle; Capital; Distance; Proximity (search for similar items in EconPapers)
Date: 2009

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Related works:
Working Paper: International financial remoteness and macroeconomic volatility (2007)
Working Paper: International Financial Remoteness and Macroeconomic Volatility (2007)
Working Paper: International Financial Remoteness and Macroeconomic Volatility (2008)
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Persistent link: http://EconPapers.repec.org/RePEc:eee:deveco:v:89:y:2009:i:2:p:250-257

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