New Perspectives on Financial Globalization

International Monetary Fund
Washington D.C., April 26-27, 2007

This website contains papers that will be presented at the Conference on New Perspectives on Financial Globalization. The views expressed in these papers are those of the authors only, and the presence of them, or of links to them, on the IMF website does not imply that the IMF, its Executive Board, or its management endorses or shares the views expressed in the papers

The conference, sponsored by the IMF's Research Department and Cornell University, aims at providing a forum to present recent theoretical and empirical research on the macroeconomic implications of financial globalization.

Note: Only the Economic Forum (Session VII) is open to the public. To obtain (registration and) information, please send an e-mail with your name and affiliation to The deadline for public registration is Friday, April 20, 2007.

DAY 1 - Thursday, April 26


Opening Remarks


Simon Johnson (Economic Counsellor and Director, Research Department, IMF)


Session I: Sovereign Debt and Overborrowing


Chair: Jonathan Ostry (Deputy Director, Research Department, IMF)

Individual versus Aggregate Collateral Constraints and the Overborrowing Syndrome by Martin Uribe (Duke University)

Discussant: Mark Wright (UCLA)

Persistent Gaps, Volatility Types, and Default Traps by Luis Catao (IMF), Ana Fostel (George Washington University) and Sandeep Kapur (University of London)

Discussant: Vivian Yue (NYU)


Coffee Break



Session II: International Portfolios and Global Imbalances


Chair: Timothy Callen (Division Chief, Research Department, IMF)

A Portfolio Model of Capital Flows to Emerging Markets by Michael B. Devereux (University of British Columbia and IMF) and Alan Sutherland (University of St. Andrews)

Discussant: Martin Evans (Georgetown University)

Are Valuation Effects Desirable from a Global Perspective? By Pierpaolo Benigno (Luiss University-Rome)

Discussant: Philip Lane (Trinity College-Dublin)


Luncheon (by invitation only)

Luncheon Remarks: Frederic S. Mishkin (Governor, Federal Reserve Board)

Introduced by Simon Johnson (Economic Counsellor and Director, Research Department, IMF)


Session III: Financial Globalization, Risk Sharing and Institutions


Chair: Eduardo R. Borensztein (Advisor, Research Department, IMF)

Financial Development, Openness and Institutions: Evidence from Panel Data, by Badi Baltagi (Syracuse University), Panicos Demetriades (University of Leicester) and Siong H. Law (University of Putra-Malaysia)

Discussant: Sebnem Kalemli-Ozcan (University of Houston)

How Does Financial Globalization Affect Risk Sharing? Patterns and Channels By M. Ayhan Kose (IMF), Eswar Prasad (Cornell University) and Marco E. Terrones (IMF)

Discussant: Jonathan Heathcote (Georgetown University and FRB)


Coffee Break



Session IV: Volatility and Global Capital Flows


Chair: Paolo Mauro (Division Chief, Research Department, IMF)

International Financial Remoteness and Macroeconomic Volatility by Andrew Rose (UC-Berkeley) and Mark M. Spiegel (FRB of San Francisco)

Discussant: Linda Goldberg (FRB of New York)

The Composition of Capital Flows when Emerging Market Firms Face Financing Constraints by Katherine A. Smith (U.S. Naval Academy) and Diego Valderrama (FRB of San Francisco)

Discussant: Doireann Fitzgerald (Stanford University)

DAY 2 - Friday, April 27


Session V: Sudden Stops: Macroeconomic Effects and Policy Implications


Chair: Ceyla Pazarbasioglu (Division Chief, Monetary and Capital Markets Department, IMF)

Sudden Stop, Sectoral Reallocation, and the Real Exchange Rate, by Timothy J. Kehoe (University of Minnesota) and Kim J. Ruhl (University of Texas at Austin)

Discussant: Carlos Vegh (University of Maryland)

Precautionary Demand for Foreign Assets in Sudden Stop Economies: an Assessment of the New Mercantilism, by C. Bora Durdu (CBO), Enrique G. Mendoza (University of Maryland and IMF) and Marco E. Terrones (IMF)

Discussant: David Backus (NYU)


Coffee Break



Session VI: Financial Globalization and Economic Growth


Chair: Timothy Lane (Senior Advisor, Research Department, IMF)

Growth and the Quality of Foreign Direct Investment, by Laura Alfaro (Harvard University) and Andrew Charlton (London School of Economics)

Discussant: Garrick Blalock (Cornell University)

Growth and Risk at the Industry Level: the Real Effects of Financial Liberalization, by Andrei Levchenko (IMF), Romain Ranciere (IMF), and Mathias Thoenig (University of Geneve)

Discussant: Galina Hale (FRB of San Francisco)


Lunch (by invitation only)



Session VII: Economic Forum: New Perspectives on Financial Globalization


Venue: HQ1-R-710

Moderator: Stijn Claessens (Assistant Director, Research Department, IMF)

Panelists: Guillermo Calvo (Columbia University), Jeffrey Frankel (Harvard University), and Kenneth Rogoff (Harvard University)


Organizing Committee: M. Ayhan Kose (IMF), Enrique G. Mendoza (University of Maryland and IMF), Eswar S. Prasad (Cornell University) and Marco E. Terrones (IMF). Inquires may be directed to Christy Gray: (202) 623-4308,