We analyze the importance of global shocks for the global economy and national policy makers. More specifically, we investigate whether monetary policy has become less effective in the wake of financial globalization. We also examine whether there is increasing uncertainty for central banks due...

In this study we examine the dynamic interactions between credit growth and output growth using the spillover index approach of Diebold and Yilmaz (2012). Based on quarterly data on credit growth and GDP growth over the period 1957Q1-2012Q4 for the G7 countries we find that: i) spillovers...

pt. 1. Introduction -- pt. 2. Solutions in America and Asia -- pt. 3. Solutions in Europe -- pt. 4. Impacts and responses in the BRICs -- pt. 5. Impacts and responses in developing countries -- pt. 6. Innovation in global economic governance -- pt. 7. From G8 to G20 -- pt. 8. Conclusion.

This paper builds a general test of contagion in financial markets based on bivariate correlation analysis - a test that can be interpreted as an extension of the normal correlation theorem. Contagion is defined as a structural break in the data generating process of rates of return. Using a...