International Economic Linkages Research Articles

Globalization is Evolving, Not Ending: Notes on International Economic Linkages Amidst Geopolitical De-Risking

Globalization is Evolving, Not Ending: Notes on International Economic Linkages Amidst Geopolitical De-Risking

Decomposition of international economic linkages among top five GDP holder countries’ stock markets after the spread of Covid-19

Decomposition of international economic linkages among top five GDP holder countries’ stock markets after the spread of Covid-19

Navigating Globalization in the Aftermath of COVID-19

The COVID-19 pandemic has affected over 200 countries and territories, leading to well over 40 million confirmed cases and over 1.1 million deaths worldwide (covid19.who.int/). While many are hopeful, an effective vaccine is not yet assured, and the world still struggles with the so-called “new normal” during the pandemic. Meanwhile, even prior to the pandemic, deep structural “mega-trends” have been sweeping across the world, notably the emergence of a new era of “digital globalization”. These changes promise to re-shape international economic linkages just like the previous waves of globalization relating to trade, finance, and people. In important ways, this new globalization is linked to the 4th industrial revolution, which sees automation, artificial intelligence, the internet of things (IoT) and other technological trends reshaping not just the world economy, but also creating disruptions and spurring innovations in social and political spheres. Using a Philippine perspective, it is critical to understand the implications of these waves of change, which are sweeping across the world. Intended as an evidence-based foresight analysis. this paper maps the main features of globalization in the aftermath of COVID-19; and it outlines some initial policy directions with a particular focus on science and technology. Its main recommendation is to focus the Philippines’ effort to build-back-better from the health pandemic on areas that would improve on inclusive recovery from the pandemic, and inclusive development during the post-pandemic period.

Macro-financial linkages between emergent and sustainable economies in a context of the European sovereign debt crisis

The aim of the study is to identify the international economic linkages between European emergent countries and different economies under the European sovereign debt crisis from the 1990s through 2015. More precisely, we compared the worst-performing European economies with more economically sustainable economies (such France, Germany, the United Kingdom and Norway). Switzerland, China, Japan and the United States were also included to evaluate the external impacts on the European Union. To examine the increasing macro-financial linkages, their interactions were included in the Global VAR model. Credit variables and oil were used to analyse international transmission of the Euro area along with the US, China, Japan and Switzerland credit and aggregate demand shocks. The model was set up with quarterly data from a sample of 11 countries, and the followed global economic variables that included: Real GDP, inflation, real equity prices, real exchange rates, government bonds (10 year), interest rates (3 month) and the price of oil. The results showed that the US influence was contracted since all macroeconomic variables did not react significantly with the oil and US long-term interest rate shocks.

Migrants and International Economic Linkages: A Meta-Overview

The migration issue is a much debated subject in many developed countries. This study provides a review of the relationship between migrants and their international economic linkages. It then focuses on foreign direct investment (FDI), for both inward and outward FDI. This study aims to offer a synthesis by means of a meta-analysis of various studies, in order to test the robustness of the relationship between migration and FDI. Our results confirm that immigration has a positive impact on FDI investment in both directions (inward and outward), and that these impacts are higher when migrants are highly educated and skilled. RÉSUMÉ Le problème de la migration est un sujet qui suscite un intérêt considérable dans un grand nombre de pays évolués. Cette étude passe en revue les rapports entre les migrants et leurs liens économiques internationaux. Elle se penche en suite sur les investissements étrangers directs (IED), tant pour les IED étrangers que pour les investissements à l’étranger. L’étude s'efforce de présenter une synthèse par le biais de méta-analyses de différentes études, dans le but de tester la solidité des rapports entre migration et IED. Nos résultats confirment que la migration a eu un effet positif sur les investissements IED dans les deux sens (de l’étranger et à l’étranger, et qu'elle a un impact majeur lorsque les migrants sont des personnes haute ment qualifiées et spécialisées. RESUMEN La inmigración es un tema muy debatido en muchos países desarrollados. Este estudio proporciona una reseña de la relación entre los inmigrantes y sus enlaces económicos internacionales. Después se enfoca en la Inversión Extranjera Directa (IED), tanto de entrada como de salida. Este estudio tiene como objetivo ofrecer una síntesis mediante un metanáli sis de estudios varios para evaluar la solidez de la relación entre inmigración y la IED. Nuestros resultados confirman que la inmigración tiene un impacto positivo sobre la IED en ambas direcciones (entrada y salida), y que estos impactos son mayores cuando los inmigrantes tiene un alto nivel de educación y cualificación.

Migrants and International Economic Linkages: A Meta-Overview

The rapid growth in the foreign-born population in many high and middle-income countries in the past decades has prompted much research on the socio-economic impacts of immigration. The migration issue has become one of the most debated subjects in many developed countries. Since the early 1990s, many applied studies have been conducted on the impact of international migration on international trade, foreign direct investment, and tourism. These studies have largely adopted the same specification, viz. the log-linear gravity model in combination with the knowledge capital model, where the (logarithm of the) stock of migrants from a specific source country may be included as an additional explanatory variable. Our study provides a concise review of the relationship between migrants and their international economic linkages. It then focuses on Foreign Direct Investment (FDI), for both inward and outward FDI. The main aim of our study is to offer a synthesis by means of a meta-analysis of various studies undertaken worldwide, in order to test the robustness of the relationship between migration and foreign direct investment. Our primary results confirm that immigration has a positive impact on FDI investment in both directions (inward and outward), and that these impacts are higher when migrants are highly-educated and skilled.

Migrants and International Economic Linkages: A Meta-Overview

This discussion paper resulted in an article in Spatial Economic Analysis (2011). Volume 6, issue 4, pages 359-376. The rapid growth in the foreign-born population in many high and middle-income countries in the past decades has prompted much research on the socio-economic impacts of immigration. The migration issue has become one of the most debated subjects in many developed countries. Since the early 1990s, many applied studies have been conducted on the impact of international migration on international trade, foreign direct investment, and tourism. These studies have largely adopted the same specification, viz. the log-linear gravity model in combination with the knowledge capital model, where the (logarithm of the) stock of migrants from a specific source country may be included as an additional explanatory variable. Our study provides a concise review of the relationship between migrants and their international economic linkages. It then focuses on Foreign Direct Investment (FDI), for both inward and outward FDI. The main aim of our study is to offer a synthesis by means of a meta-analysis of various studies undertaken worldwide, in order to test the robustness of the relationship between migration and foreign direct investment. Our primary results confirm that immigration has a positive impact on FDI investment in both directions (inward and outward), and that these impacts are higher when migrants are highly-educated and skilled.

Impact of the Global Crisis on Banking Sector Soundness in Asian Low-Income Countries

The paper takes stock of the impact of the global financial crisis that began in late 2007 on banking sectors of Asian low-income countries, by exploring bank-level data provided by Bankscope. The paper examines three key channels of possible crisis spillovers: exposures to (i) valuation changes of mark-to-market financial assets, (ii) a drop in crossborder funding, and (iii) rises in NPLs prompted by international real economic linkages. The paper finds that despite relatively low financial integration, the impact of the crisis on LIC banks, particularly the largest ones, were not insignificant. Impacts were most palpable through a loan-to-crossborder funding nexus.

A Latin American Perspective on Trade Policies

This article looks at the trade policy guidelines that the region should follow in order to achieve dynamic international economic linkages, in the light of the international context, the theoretical debates on this subject, and some lessons that may be learned from the study of successful cases. It is posited that in the countries of the region, trade policy can be an instrument for macroeconomic management, fiscal management, and, at the microeconomic level, resource allocation. Its use as a second-best instrument is justified when there are constraints on the use of the best possible solutions. It is also held that there must be close coordination of the policies applied in the fields of trade, industry, and technology to ensure high levels of investment in the tradeable sectors of the economy, a form of competitiveness based on constant increases in productivity, and an improvement in the region's specialization profile. Finally, emphasis is placed on the need to strengthen the institutions of Latin American states in order to ensure that their interventions in the economy have a suitable level of effectiveness.

International Economic Relations in the 21st Century

It surprises few people today to see comments about the profound and growing extent of international economic linkages and interdependence. The causes of these developments are numerous: incredible advances in efficiency of communication, extraordinary reductions in transport costs, growing prevalence of instant tele and cyber transactions, treaty and other norms causing reduction of governmental barriers to trade, an economic climate more favorable to principles of markets economics, cross border influences of competition which have driven increases in production and service efficiencies, and last but not least, the blessing of relative peace in the world.

Measuring International Economic Linkages with Stock Market Data

Measuring International Economic Linkages with Stock Market Data

Measuring International Economic Linkages with Stock Market Data

ABSTRACTThis article develops a new framework for measuring financial and real economic linkages between countries. Using United States and United Kingdom data from 1957 to 1989, we find closer financial linkages after the Bretton Woods currency arrangement was abandoned and Britain suspended exchange controls. In a pairwise application to fifteen countries over a shorter period, we also find that news about future dividend growth is more highly correlated between countries than contemporaneous output measures. This suggests that there are lags in the international transmission of economic shocks and that contemporaneous output correlation may understate the magnitude of integration.

Measuring International Economic Linkages with Stock Market Data

The covariance between domestic and foreign equity return innovations is decomposed into components associated with news about future real and financial variables. In an application to fifteen national stock markets, we find that news about future dividend growth tends to be more highly correlated than contemporaneous output measures, suggesting that there are lags in the international transmission of real economic shocks. In addition, results from a longer sample period suggest that both real and financial linkages between the U.S. and the U.K. appear to have increased after the Bretton Woods currency arrangement was abandoned in the early 1970's.

Multinational Financial Management.

Introduction: Multinational Enterprise and Multinational Financial Management. PART ONE: ENVIRONMENT OF INTERNATIONAL FINANCIAL MANAGEMENT. The Determination of Exchange Rates. The International Monetary System. The Balance of Payments and International Economic Linkages. The Foreign Exchange Market. Currency Futures and Options Markets. Parity Conditions in International Finance and Currency Forecasting. PART TWO: FOREIGN EXCHANGE RISK MANAGEMENT. Measuring Accounting Exposure. Managing Accounting Exposure. Measuring Economic Exposure. Managing Economic Exposure. PART THREE: MULTINATIONAL WORKING CAPITAL MANAGEMENT. Financing Foreign Trade. Current Asset Management. Managing the Multinational Financial System. PART FOUR: FINANCING FOREIGN OPERATIONS. International Financing and International Financial Markets. Special Financing Vehicles. International Banking Trends and Strategies. The Cost of Capital for Foreign Investments. PART FIVE: FOREIGN INVESTMENT ANALYSIS. International Portfolio Investment. Corporate Strategy and Foreign Direct Investment. Capital Budgeting for the Multinational Corporation. The Measurement and Management of Political Risk. Glossary of Key Words and Terms in International Finance.

Alternative Simulations of the Fugi Global Macroeconomic Model

This article aims to make projections of the world economy in the period 1983-90 using a latest global macroeconomic model named as FUGI-GMEM type V011-62. The model classifies the world into 62 countries/regions. Where the global interdependence is incorporated into an integral part of the world economy through international economic linkages. Based on alternative simulations, the author envisages international instability and supplemental ways for improving stability for the interdependent world economy through changes in economic growth rates, employment, wages, prices, money supply, interest rates, public finance, trade, capital movement, international balance of payments and foreign exchange rates, etc., in each country or region.

A Macroeconomic Study on the Future of Global Interdependence

This paper presents an advanced computer-aided global macroeconomic modelling on the interdependent world economy. The model divides the world into 62 countries/regions; it has 12,700 equations and 25,000 software steps. Special attention has been given to envisage the future of global interdependence where each national economy is incorporated into an integral part of the world economy through international economic linkages. Based on alternative simulations, the model shows future images of the interdependent world economy through changes in economic growth rates, employment, wages, prices, money supply, interest rates, public finance, trade, private capital movement, official development assistance, international balance of payment and foreign exchange rates, etc., in each country or region. It forecasts that the world economic growth in the 1980s will likely be around 2.9 percent annual rate according to the Baseline projection.

North-South relations: Alternative policy simulations for the world economy in the 1980s

This article makes projections of the world economy in the North-South context for the period 1981–1990 using a latest global version of a macroeconomic model named FUGI-GNEM type IV 011–62. The model classifies the world into 62 countries/regions, where the North-South interdependence is incorporated into an integral part of the world economy through international economic linkages. Based on alternative simulations, the author presents future images of the North-South interdependent world economy through changes in economic growth rates, employment, wages, prices, money supply, interest rates, public finance, trade, capital movement, international balance of payments, foreign exchange rates, etc., in each country or region. The model forecasts that the real economic growth of the developing countries as a whole in the 1980s will likely be around 4%–7% annual rate according to alternative policy scenarios.