This paper reviews the central features of France’s capital controls in the 70's and 80's and strives to assess their ability, in the context of various exchange rate mechanisms, to regulate capital flows and to stabilize the exchange rate while allowing France to preserve a measure of...

At the start of the transition process in previously centrally planned economies the inflow of foreign capital was considered one of the main factors that allows the reduction of the economic and social costs of transformation. However, in practice, the role of foreign capital has appeared to be...

Since the study of Feldstein/Horioka (1980), the high correlation between investment and saving rates is a controversial, but first of all often confirmed empirical evidence. In this paper, this correlation is investigated once again for the EU-countries in the time period from 1960 to 1997. In...

This study asks whether greater foreign investment reduces real exchange rate volatility in eight emerging Asian countries. As a noteworthy aspect, we utilize detailed measures of foreign investment, including foreign direct investment, foreign portfolio equity, and foreign debt. Our findings...

The current account in developed countries is highly persistent and volatile in comparison to output growth. The standard intertemporal current account model with rational expectations (RE) fails to account for the observed current account dynamics together with persistent changes in...

One key focus of the on-going debate on the integration of international financial markets have been measures to lengthen the maturity of foreign debt, as short-term debt is typically considered to be highly volatile. The transition economies of Central and Eastern Europe are one group of...

This paper shows that global capital markets cannot, by themselves, achieve net transfers of financial capital between countries and that both the integration of global financial markets as well as the integration of global goods markets are needed to achieve net transfers of capital between...

This paper proposes a novel methodology for identifying episodes of strong capital flows based on a regime-switching model. In comparison with the existing literature, a key advantage of our methodology is to estimate capital flow regimes without the need for context- and sample-specific...

We examine the implications of a North-South trade accord where investments in the Southern partner nation exhibit country risk. Our analysis demonstrates that North-South trade accords can serve as credibility-enhancing mechanisms that induce additional foreign capital inflows into Southern...

Purpose - The issue of which financial initial conditions are necessary to materialize the benefits of financial globalization remains open to debate in the literature. In this paper, we try to put some empirical structure on the concept of financial threshold conditions in order to give...