Financial Market Globalization and Endogenous Ranking Reversals

TOPIC: 

Financial Market Globalization and Endogenous Ranking Reversals

ABSTRACT

This paper investigates the effects of financial market globalization on the instability of nations. The world economy consists of two countries, which differ only in their levels of capital stock. Each country is represented by the standard overlapping generations model, modified only to incorporate entrepreneurial projects that are indivisible and entail uninsurable risk. The presence of the international financial market causes the symmetric steady state to lose its stability when the projects are sufficiently risky. The instability inevitably breaks the symmetry of the world economy, in which global imbalances and GDP ranking reversals emerge endogenously.

Presenter

Tomoo Kikuchi
National University Singapore

Research Fields

Macroeconomic Theory, Macroeconomic Dynamics, International Finance, Economic Growth

Date:

20 September 2013 (Friday)

Time: 

4pm - 5.30pm

Venue: 

Seminar Room 5.1, Level 5
School of Economics 
Singapore Management University
90 Stamford Road
Singapore 178903