TY - JOUR
T1 - FINANCIAL INTEGRATION, GROWTH AND VOLATILITY
AU - EPAULARD, ANNE
AU - POMMERET, AUDE
N1 - Full text of this publication does not contain sufficient affiliation information. With consent from the author(s) concerned, the Research Unit(s) information for this record is based on the existing academic department affiliation of the author(s).
PY - 2016/8
Y1 - 2016/8
N2 - The aim of this paper is to evaluate the welfare gains from financial integration for developing and emerging market economies. To do so, we build a stochastic endogenous growth model for a small open economy that can: (i) borrow from the rest of the world; (ii) invest in foreign assets; and (iii) receive foreign direct investment. The model is calibrated on 46 emerging market and developing economies for which we evaluate the upper bound for the welfare gain from financial integration. For plausible values of preference parameters and actual levels of financial integration, the mean welfare gain from financial integration is around 13.5% of initial wealth. Compared with financial autarky, actual levels of financial integration translate into higher annual growth rates.
AB - The aim of this paper is to evaluate the welfare gains from financial integration for developing and emerging market economies. To do so, we build a stochastic endogenous growth model for a small open economy that can: (i) borrow from the rest of the world; (ii) invest in foreign assets; and (iii) receive foreign direct investment. The model is calibrated on 46 emerging market and developing economies for which we evaluate the upper bound for the welfare gain from financial integration. For plausible values of preference parameters and actual levels of financial integration, the mean welfare gain from financial integration is around 13.5% of initial wealth. Compared with financial autarky, actual levels of financial integration translate into higher annual growth rates.
UR - http://www.scopus.com/inward/record.url?scp=84983036897&partnerID=8YFLogxK
UR - https://www.scopus.com/record/pubmetrics.uri?eid=2-s2.0-84983036897&origin=recordpage
U2 - 10.1111/1468-0106.12177
DO - 10.1111/1468-0106.12177
M3 - RGC 21 - Publication in refereed journal
SN - 1361-374X
VL - 21
SP - 330
EP - 357
JO - Pacific Economic Review
JF - Pacific Economic Review
IS - 3
ER -
