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Published Papers

Financial Integration and Growth in a Risky World*

Coeurdacier, N, Rey, H, Winant, P
Date Published: Forthcoming
Journal of Monetary Economics.

We revisit the debate on the bene fits of financial integration in a two-country neoclassical growth model with aggregate uncertainty. We account simultaneously for gains from a more efficient capital allocation and gains from risk sharing -|together with their interaction. Using global numerical methods allows us to do meaningful welfare comparisons along the transition paths. We fi nd small gains from integration, even for riskier and capital scarce emerging economies. These countries import capital for efficiency reasons before exporting it for self -insurance, leading to capital flows and growth reversals along the transition. This opens the door to a richer set of empirical implications than
previously considered in the literature.

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*This material is based upon work supported by the European Research Council grant number 210584 on "Countries' external balance sheets, dynamics of international adjustment and capital flows"

Also NBER working Paper 21817, CEPR Discussion Paper 11009
Replication materials:
Computer codes and documentation available at https://bitbucket.org/albop/finint/

For access to dolo: http://github.com/econforge/dolo.

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