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Title:Business Cycle Fluctuations and International Financial Integration PDF Logo
Authors:Kizys, Renatas
Pierdzioch, Christian
Issue Date:2004
Series/Report no.:Kieler Arbeitspapiere 1197
Abstract:Theoretical research on the determinants of business-cycle fluctuations implies that the degree of international financial integration can have important implications for the propagation of, e.g., macroeconomic policy shocks in an open economy. An important assumption underlying this research is that the degree of financial integration can be taken as exogenously given. Because recent empirical research has demonstrated that financial integration may change over time, we use data for the G7 countries to test how well this assumption fits to the data. We find that one can maintain, as a rule, the assumption that the degree of financial integration is invariant to the determinants of the business-cycle fluctuations. We find, however, a few exceptions from this rule, and we also find that shocks tend to have a highly persistent effect on financial integration.
Subjects:Open economy macroeconomics
Business cycles
Financial integration
JEL:F33
F41
F36
Document Type:Working Paper
Appears in Collections:Kieler Arbeitspapiere, IfW
Publikationen von Forscherinnen und Forschern des IfW

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