DP3769 International Financial Integration
|Author(s):||Philip R. Lane, Gian Maria Milesi-Ferretti|
|Publication Date:||February 2003|
|Keyword(s):||capital flows, international financial integration, rates of return|
|Programme Areas:||International Macroeconomics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=3769|
In recent decades, foreign assets and liabilities in advanced countries have grown rapidly relative to GDP, with the increase in gross cross-holdings far exceeding the size of net positions. Moreover, the portfolio equity and FDI categories have grown in importance relative to international debt stocks. In this Paper, we describe the broad trends in international financial integration for a sample of industrial countries, and seek to explain the cross-country and time-series variation in the size of international balance sheets. We also examine the behaviour of the rates of return on foreign assets and liabilities, relating them to ?market? returns.