Recent crises have seen very large spikes in asset price risk without dramatic shifts in fundamentals. We propose an explanation for these risk panics based on self-fulfilling shifts in risk made possible by a negative link between the current asset price and risk about the future asset price....

For the past four or five decades, the international monetary system has operated on a ’dollar standard’. Popular discussion suggests that this gives the US an advantage in the use of monetary policy. This Paper analyses the determination of monetary policy in a world with a dollar standard,...

This Paper analyses the co-movement in activity, measured by GDP and industrial production, between the G7 countries for the period 1972-2002. For that purpose, a dynamic factor model is estimated using Kalman Filtering techniques. In addition to separating common and country-specific -...

Recent experience suggests that the operation of monetary policy in emerging market economies is severely limited by the presence of financial constraints. This is seen in the tendency to follow contractionary monetary policy during crises, and the observation that these countries pursue much...

Investment liberalizing countries are often concerned that cross-border mergers & acquisitions might have an adverse effect on domestic firms and benefit multinational enterprises (MNEs). Given that domestic assets are sufficiently scarce, we identify a preemption effect and an asset...

The nation-state system, democratic politics, and full economic integration are mutually incompatible. Of the three, at most two can be had together. The Bretton Woods/GATT regime was successful because its architects subjugated international economic integration to the needs and demands of...

How should economists be responding to the arguments made by anti-globalization activists? This Paper examines the writings of Naomi Klein, one of the leaders in the anti-globalization movement. The contents of her influential book No Logo are summarized and some problems with her analysis of...

This paper illustrates some of the most important insights of the literature on international fiscal and monetary policy coordination. It notes that the analysis of international policy interactions is enriched by taking the incentives in the domestic policy process into account. These...

If one ranks cities by population, the rank of a city is inversely related to its size, a well-documented phenomenon known as Zipf's Law. Further, the growth rate of a city's population is uncorrelated with its size, another well-known characteristic known as Gibrat's Law. In this paper, I show...

We propose a new, valuation-based measure of world equity market segmentation. While we observe decreased levels of segmentation in many developing countries, the level of segmentation is still significant. In contrast to previous research, we characterize the factors that account for variation...