Financial globalization and exchange rates

Philip Lane and Gian Maria Milesi-Ferretti ()

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: The founders of the Bretton Woods System sixty years ago were primarily concerned with orderly exchange rate adjustment in a world economy that was characterized by widespread restrictions on international capital mobility. In contrast, the rapid pace of financial globalization during recent years poses new challenges for the international monetary system. In particular, large gross cross-holdings of foreign assets and liabilities means that the valuation channel of exchange rate adjustment has grown in importance, relative to the traditional trade balance channel. Accordingly, this paper empirically explores some of the inter-connections between financial globalization and exchange rate adjustment and discusses the policy implications.

Keywords: Financial integration; capital flows; external assets and liabilities (search for similar items in EconPapers)
JEL-codes: F31 F32 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2004-12
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (53)

Downloads: (external link)
http://eprints.lse.ac.uk/19926/ Open access version. (application/pdf)

Related works:
Working Paper: Financial Globalisation and Exchange Rates (2005)
Working Paper: Financial Globalization and Exchange Rates (2005)
Working Paper: Financial Globalization and Exchange Rates (2004)
Working Paper: Financial Globalization and Exchange Rates (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:19926

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