International Financial Remoteness and Macroeconomic Volatility

Andrew Rose and Mark Spiegel

No 14336, NBER Working Papers from National Bureau of Economic Research, Inc

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 further 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.

JEL-codes: E32 F32 (search for similar items in EconPapers)
Date: 2008-09
New Economics Papers: this item is included in nep-bec, nep-cba, nep-mac and nep-opm
Note: IFM
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Published as Rose, Andrew K. & Spiegel, Mark M., 2009. "International financial remoteness and macroeconomic volatility," Journal of Development Economics, Elsevier, vol. 89(2), pages 250-257, July.

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Related works:
Journal Article: International financial remoteness and macroeconomic volatility (2009)
Working Paper: International Financial Remoteness and Macroeconomic Volatility (2007)
Working Paper: International financial remoteness and macroeconomic volatility (2007)
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