Conference on International Macro-Finance

April, 24–25, 2008
HQ1, Meeting Halls A & B, IMF Headquaters
Washington, D.C.

This website contains papers and web links to papers that were presented at the conference. 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 International Monetary Fund and the World Economy and Finance Research Programme of the UK Economic and Social Research Council held a conference on international macro-finance at the IMF headquarters in Washington, DC, on April 24-25, 2008. The conference provided a forum to present recent theoretical and empirical research narrowing the gap between "open-economy macro" and "finance" approaches to international financial issues.

Note on the Papers: Papers presented at the conference are under consideration for publication in a special issue of the Journal of International Economics (JIE). The papers are presented below as prepared for the conference.

Conference Organizers:
Michael Devereux (University of British Columbia), Akito Matsumoto (IMF), Alessandro Rebucci (IMF), and Alan Sutherland (University of St Andrews).


Day 1 — Thursday, April 24, 2008
8:45 a.m. Opening Remarks – Alex Gibbs, U.K. Executive Director, IMF
Session I: Exchange Rate Behavior and Reserve Accumulation
(Session Chairperson: Jonathan Ostry, Deputy Director, RES)
9:00 a.m. News Shocks, Exchange Rates, and Equity Prices (PDF File Size: 363kb)
Pietro Cova (Bank of Italy), Akito Matsumoto (IMF), Massimiliano Pisani (ECB), and Alessandro Rebucci (IMF)
Discussant: Martin Bodenstein (FRB)
Optimized Reserve Holdings and Country Portfolios (PDF File Size: 245kb)
Luca Dedola (ECB) and Roland Straub (ECB)
Discussant: Olivier Jeanne (IMF)
10:30 a.m. Coffee Break
Session II: The U.S. External Return Puzzle
(Session Chairperson: Anoop Singh, Director, WHD)
10:45 a.m. Why Do Foreigners Invest in the United States? (PDF File Size: 388kb)
Kristin Forbes (MIT)
Discussant: Steven Kamin (FRB)
The Decomposition of the US External Returns Differential (PDF File Size: 355kb)
Stephanie Curcuru (FRB), Tomas Dvorak (Union College), and Frank Warnock (Virginia)
Discussant: Gian Maria Milesi-Ferretti (IMF)
12:30 p.m. Luncheon – IMF Gallery (by invitation only)
Keynote Speech (based on the following paper):
"Can Peso Problems Explain Carry Trade Returns?"
Martin Eichenbaum (Northwestern University)
Session III: Micro View of the FX Market
(Session Chairperson: Tim Lane, Senior Advisor, RES)
2:15 p.m. Exchange Rate Forecasting, Order Flow and Macroeconomic Information (PDF File Size: 452kb)
Dafinn Rime (Norges Bank), Lucio Sarno (Warwick), and Elvira Sojli (Warwick)
Discussant: Francis Diebold (University of Pennsylvania)
Private Information and the Monetary Model of Exchange Rates: Evidence from a Novel Data Set (PDF File Size: 300kb)
Menzie D. Chinn (Wisconsin) and Michael J. Moore (Queen's University Belfast)
Discussant: Martin Evans (Georgetown)
3:45p.m. Coffee Break
Session IV: Portfolio View of the Current Account
(Session Chairperson: Stijn Claessens, Assistant Director, RES)
4:00 p.m. Patterns of International Capital Raisings (PDF File Size: 352kb)
Juan Carlos Gozzi (Brown), Ross Levine (Brown), and Sergio Schmukler (World Bank)
Discussant: Chris Meissner (Cambridge)
The Long and Short of It: Determinants of Foreign Currency Exposure in External Balance Sheets (PDF File Size: 370kb)
Philip Lane (Trinity College Dublin) and Jay Shambaugh (Dartmouth)
Discussant: Laura Alfaro (Harvard)
Day 2 — Friday, April 25, 2008
Session V: External Adjustment
(Session Chairperson: TBA)
9:00 a.m.
Valuation Effects and the Dynamics of Net External Assets (PDF File Size: 497kb)
Michael Devereux (British Columbia) and Alan Sutherland (University of St. Andrews)
Discussant: Jaewoo Lee (IMF)
An Asset-Pricing View of External Adjustment (PDF File Size: 505kb)
Anna Pavlova (London Business School) and Roberto Rigobon (MIT)
Discussant: Michael Kumhof (IMF)
10:30 a.m. Coffee Break
Session VI: International Portfolios
(Session Chairperson: Kalpana Kochher, Senior Advisor, APD)
10:45 a.m. Financial Globalization, Home Equity Bias and International Risk-Sharing (PDF File Size: 294kb)
Gianluca Benigno (NY FED and LSE) and H. Kucuk-Tuger (LSE)
(Discussant: Viktoria Hnatkovska (British Columbia)
International Portfolios, Capital Accumulation and Foreign Assets Dynamics (PDF File Size: 394kb)
Nicolas Coeurdacier (London Business School) and Robert Kollmann (ECARES)
Discussant: Kosuke Aoki (London School of Economics)
12:30 p.m. Lunch
Session VII: Balance Sheet View of International Portfolio
(Session Chairperson: Tam Bayoumi, Assistant Director, WHD)
1:30 p.m. A new Perspective on "The New Rule" of the Current Account (PDF File Size: 391kb)
Cedric Tille (The Graduate Institute, Geneva) and Eric van Wincoop (Virginia)
Discussant: Kai Guo (Harvard)
Stylized Facts for a Portfolio Theory of the Current Account
Aart Kraay (World Bank) and Jaume Ventura (CREI)
Discussant: Cristina Arellano (Minnesota)
3:00 p.m. Coffee Break
Panel Session: The Financial Turmoil and Global Imbalances
3:15 p.m. Moderator: Simon Johnson (Economic Counsellor and Director of Research, IMF)
Panelists: Michael Dooley (University of California, Santa Cruz),
Takatoshi Ito (University of Tokyo), and Vincent Reinhart (AEI)