It is being increasingly held in the literature that, in a globalizing world, flexible exchange rates are no longer enough to insulate an economy against external shocks. Our empirical results corroborate the observation that, in the past few years, global factors have had a crucial impact on...

Global factors are becoming increasingly important as a cause of international capital flows. It is nearly impossible for some countries to protect themselves from outside influences on their financial markets. This paper investigates the extent to which various global factors such as stock...