Discussion Paper Details

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Title: The Financial Crisis and the Geography of Wealth Transfers

Author(s): Pierre-Olivier Gourinchas, Hélène Rey and Kai Alexander Truempler

Publication Date: September 2011

Keyword(s): global financial crisis, international monetary system, reserve currency and valuation effects

Programme Area(s): International Macroeconomics

Abstract: This paper studies the geography of wealth transfers during the 2008 global financial crisis. We construct valuation changes on bilateral external positions in equity, direct investment and portfolio debt at the height of the crisis to map who benefited and who lost on their external exposure. We find a very diverse set of fortunes governed by the structure of countries' external portfolios. In particular, we are able to relate the gains and losses on debt portfolios to the country's exposure to ABCP conduits and the extent of dollar shortage.

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Bibliographic Reference

Gourinchas, P, Rey, H and Truempler, K. 2011. 'The Financial Crisis and the Geography of Wealth Transfers'. London, Centre for Economic Policy Research.