Global Bond Portfolios and EMU
Philip Lane ()
MPRA Paper from University Library of Munich, Germany
We examine the bilateral composition of international bond portfolios for the euro area and the individual EMU member countries. We find considerable support for “euro area bias”: EMU member countries disproportionately invest in one another relative to other country pairs. Another striking pattern is the positive connection between trade linkages and financial linkages in explaining asymmetries across EMU member countries in terms of their outward and inward bond investments vis-a-vis external counterparties. At the aggregate level, it is those countries physically closest to the euro area that are both the most important destinations and sources for external bond investment vis-a-vis the euro area. Our empirical results support the notion that financial regionalization is the leading force underlying financial globalization.
JEL-codes: G0 (search for similar items in EconPapers)
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Date: 2005-05-20, Revised 2006-02-15
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Published in International Journal of Central Banking Number 2.Volume(2006): pp. 1-23
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Journal Article: Global Bond Portfolios and EMU (2006)
Working Paper: Global Bond Portfolios and EMU (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:654
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