The Common Foreign and Security Policy (CFSP) of the European Union (EU) faces an identity crisis to which the member states do not seem eager to put an end. Making incremental changes without defining the objectives will not rise the trust in the EU as a strong international actor. Thus, this...

This Selected Issues paper analyses the impact of a potential rebalancing of Icelandic residents’ investment portfolios as capital controls are lifted. It applies optimal portfolio theory to calculate the potential rebalancing toward foreign assets, and then makes an estimate of the...

The Common Foreign and Security Policy (CFSP) of the European Union (EU) faces an identity crisis to which the member states do not seem eager to put an end. Making incremental changes without defining the objectives will not rise the trust in the EU as a strong international actor. Thus, this...

Asian equity markets have grown significantly in size since the early 1990s, driven by strong international investor inflows, growing regional financial integration, capital account liberalization, and structural improvements to markets. The development of equity markets provides a more...

We analyze capital flows to emerging markets in a framework that incorporates two quantitative measures of financial integration, the intensity of capital controls and the extent of cross border listings, while controlling for traditional global (push) and country specific (pull) factors. Two...

We analyze a unique data set and uncover a remarkable result that casts a new light on the home bias phenomenon. The data are comprehensive, security-level holdings of emerging market equities by U.S. investors. We document, as expected, that at a point in time U.S. portfolios are tilted towards...

Using a panel of 27 countries, we analyze the effects of stock market liberalization on financial and macroeconomic development. We find that liberalization is associated with a short-term increase in real private investment growth of about 14 percentage points cumulatively in the four years...

Identifying determinants of the output-inflation tradeoff has long been a key issue in business cycle research. We provide evidence that in countries with greater restrictions on capital mobility, a given reduction in the inflation rate is associated with a smaller loss in output. This result is...

This paper starts with a general discussion about how the collective action literature has treated the issue of group size. This discussion then turns to deciding how applicable the general propositions of collective action are to the case of enlargement, and some suggestions are put forward on...

This paper starts with a general discussion about how the collective action literature has treated the issue of group size. This discussion then turns to deciding how applicable the general propositions of collective action are to the case of enlargement, and some suggestions are put forward on...