The current global-imbalance literature (which explains why capital flows from poor to rich countries) is unable to explain China's foreign asset positions because capital cannot flow out of China under capital controls. Hence, this literature has not succeeded in explaining China's large and...

Since the late-1990s, the global economy is characterised by historically low risk premia and an unprecedented widening of external imbalances. This paper explores to what extent these two global trends can be understood as a reaction to three structural shocks in different regions of the global...

It has been argued that the global financial crisis 2007–2009 was intrinsically related to two largely unprecedented phenomena in the global economy: (i) exceptionally benign financial market conditions as mirrored in historically low risk premia and buoyant asset price developments as well as...

The Foreign Direct Investments (FDI) formed one of the most important pillars of economic transformation of the so called former Eastern Bloc countries. In general, many countries considered it to be the only solution for recovery of industry and trade in respect of 'mismanaged' domestic...

The events of December 1989 represented the trigger which determined the future evolution of Romania from an economic and political point of view. Among the first reform measures, adopted after the fall of communism, were also those regarding Romania’s commercial policy. Being aware of the...

This paper shows that a regional bias resulting from trade integration alters the transmission of a country's monetary policy by shifting the burden of the exchange rate adjustment towards the less integrated trading partners. I first develop a simple model which illustrates how a concentration...

This paper shows that regional trade integration shifts the burden of the exchange rate adjustment towards the less integrated trading partners. Thus, they bear the cost of trade balance expansion, while competitive exchange rate moves vis-a-vis RTA trading partners result in no expansion or...

This paper documents the novel fact that Regional Trade Agreements (RTA) decrease bilateral trade imbalances as measured by conventional measure of the net export share in gross trade. While on average an RTA decreases bilateral trade imbalance by 7%, greater trade integration through a deeper...

This paper studies the importance of price and cost competitiveness for intra- and extra-euro area trade flows of euro area countries. A standard error correction framework shows that price competitiveness is a relatively more important driver of trade flows outside the euro area as compared to...

We explore the long and short run relationship between private consumption, disposable income and housing and financial wealth approximated by price indices for a panel of industrialized countries. Consumption, income and wealth are cointegrated in their common, but not in their idiosyncratic...