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dc.titleMaking International Financial Integration Work for Low-Saving Countries
dc.contributor.authorCavallo, Eduardo A.
dc.contributor.authorFernández-Arias, Eduardo
dc.contributor.authorMarzani, Matías
dc.contributor.orgunitDepartment of Research and Chief Economist
dc.date.available2017-09-11T00:00:00
dc.date.issue2017-07-27T00:00:00
dc.description.abstractDeeper financial integration is expected to enable low-saving countries to increase domestic investment but also to increase crisis risks by facilitating the accumulation of risky foreign liabilities. This paper explores the connections between financial integration, investment and crisis risk to assess this tradeoff. It confirms expectations but also finds that the accumulation of safe foreign assets that financial integration brings is an important risk offset that in many cases even eliminates the risk factor from the tradeoff altogether. Furthermore, it shows that the risk features of assets and liabilities depend on their type. Ultimately, whether international financial integration is in fact a reliable remedy for individual countries critically depends on the portfolio composition of their foreign assets and liabilities.
dc.identifier.doihttp://dx.doi.org/10.18235/0011806
dc.identifier.urlhttps://publications.iadb.org/publications/english/document/Making-International-Financial-Integration-Work-for-Low-Saving-Countries.pdf
dc.language.isoen
dc.mediumAdobe PDF
dc.publisherInter-American Development Bank
dc.subjectMacroeconomy
dc.subject.jelcodeG15 - International Financial Markets
dc.subject.jelcodeF32 - Current Account Adjustment • Short-Term Capital Movements
dc.subject.jelcodeG01 - Financial Crises
dc.subject.jelcodeH63 - Debt • Debt Management • Sovereign Debt
dc.subject.jelcodeF34 - International Lending and Debt Problems
dc.subject.jelcodeE44 - Financial Markets and the Macroeconomy
dc.typeWorking Papers
idb.identifier.pubnumberWorking Papers
idb.operationRG-K1089
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