DP10592 Financial Flows and the International Monetary System
|Author(s):||Evgenia Passari, Hélène Rey|
|Publication Date:||May 2015|
|Keyword(s):||financial integration, monetary policy|
|Programme Areas:||International Macroeconomics, Financial Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=10592|
We review the findings of the literature on the benefits of international financial flows and find that they are quantitatively elusive. We then present evidence on the existence of a global cycle in gross cross border flows, asset prices and leverage and discuss its impact on monetary policy autonomy across different exchange rate regimes. We focus in particular on the effect of US monetary policy shocks on the UK's financial conditions.