Publicação
Essays on International economics : external balances cyclical adjustment and cross-border financial linkages
| Resumo: | International economics focuses on the linkages among economic agents who are resident in di erent countries. The analysis of external interactions has become more important over the last decades with the increase of the economic interdependence as a result of the globalization phenomenon. These connections are summarized in international accounts and are classiffed as transactions when both parties (a resident and a non-resident economy) agree on the creation, transformation, exchange, transfer, or extinction of economic value, involving changes in ownership of goods and/or nancial assets, the provision of services, or the provision of labour and capital. Moreover, the international transactions are distinguished between non- financial and financial transactions. The non-financial transactions are related with the trade in goods and services, the payments to non-resident production factors or simply transfers, under which different countries exchange 'something for nothing' (e.g., migrants' remittances). The exchange of financial assets/liabilities between two different countries is considered a financial transaction (e.g., the issuance/redemption of a bond). This type of transactions give rise to an end-of-period stock, the International Investment Position. The International Investment Position is also inffuenced by other economic flows, such as revaluations (price changes or exchange rate changes) and other adjustments. Although transactions are characterized by the existence of an agreement (or compulsory transfers), other flows are driven by market conditions in the case of revaluations (the exchange rate market, for e.g.), or by other factors like the existence of a bankruptcy, de ned as other adjustments. The globalization has created very strong interdependences between nations based on economic linkages as, for example, international trade, among residents in di erent countries. Understanding the economic interactions established between one country and the rest of the world is crucial to support good policy making decisions and to prevent global economic and nancial crises. Nevertheless, analysing economic links at an aggregate level, may not re ect the existence of asymmetries at an individual level (between one country and its trade partners). Therefore, it is essential to complement the aggregate analysis, with an individual perspective focused on bilateral relationships between each economy and its partners. Since 2020, due to the pandemic Covid-19, international linkages like travel have diminished due to the existence of mobility restrictions, and new forms were strengthened (the e-Commerce for e.g.). Nevertheless, these restrictions will not last forever and new forms of international economic and nancial interactions will certainly exist in the future. The analysis of international linkages is crucial to (re)design the international trade and to promote the economic welfare. This thesis focuses on the aggregate and bilateral perspective of nancial and non- nancial interactions among the world economies and contributes to the literature in three di erent ways. Chapter 1 uses the methodology suggested by Fabiani et al. (2016) to compute cyclically-adjusted current account balances for the Portuguese economy in the period 1995-2017. The methodology makes use of domestic and foreign output gaps, export elasticities and the import content of domestic demand, distinguishing between cyclically-adjusted exports and imports. In addition, we compute the cyclically-adjusted bilateral exports and imports relative to the main Portuguese trade partners. We conclude that the strong current account adjustment observed in the Portuguese economy after 2010 was mainly non-cyclical, though a positive e ect resulting from cyclical developments was also observed. Chapter 2 computes the cyclical-adjusted trade account balances for a set of economies focusing on two distinct periods: before the 2008 global economic and nancial crisis and during this crisis. The methodology goes beyond the Chapter 1 methodology and uses a bilateral approach to measure the cyclically adjusted trade accounts. The results suggest that, although global imbalances reduced at a global level, there are asymmetric adjustments across countries. Moreover, the cyclical adjustment of the current account during the nancial crisis period was higher than in the previous years for many countries. On an individual basis, the United States plays the most important role of the bilateral cyclical adjustment. Finally, Chapter 3 considers cross-country linkages between banking sysii tems to assess the cascading e ects that emerge from shocks. Stylized shocks involve a reduction of liabilities from a banking system in a country towards others. The negative e ects on the net assets of other banking systems, if beyond a given threshold, will trigger a reduction of their own liabilities and the sequential propagation of the initial shock. No other endogenous economic e ects are considered. The stylized exercise uses data for cross-border assets and liabilities in a sample of twenty-four countries in 2018. Results highlight the United Kingdom as the most affected country in the event of a systemic shock in each of the G7 plus China group. Moreover, the stylized simulations indicate that the United States is the country whose potential shocks are the most powerful to affect aggregate world cross-border claims of banking systems. |
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| Autores principais: | Silva, João Miguel Falcão Pinto da |
| Assunto: | Cyclical adjustment Bilateral adjustment, External Balance Financial crisis Systemic shocks Ajustamento cíclico Ajustamento bilateral Equilíbrio externo Crise financeira Choques sistémicos |
| Ano: | 2022 |
| País: | Portugal |
| Tipo de documento: | tese de doutoramento |
| Tipo de acesso: | acesso aberto |
| Instituição associada: | Universidade de Lisboa |
| Idioma: | inglês |
| Origem: | Repositório da Universidade de Lisboa |
| Resumo: | International economics focuses on the linkages among economic agents who are resident in di erent countries. The analysis of external interactions has become more important over the last decades with the increase of the economic interdependence as a result of the globalization phenomenon. These connections are summarized in international accounts and are classiffed as transactions when both parties (a resident and a non-resident economy) agree on the creation, transformation, exchange, transfer, or extinction of economic value, involving changes in ownership of goods and/or nancial assets, the provision of services, or the provision of labour and capital. Moreover, the international transactions are distinguished between non- financial and financial transactions. The non-financial transactions are related with the trade in goods and services, the payments to non-resident production factors or simply transfers, under which different countries exchange 'something for nothing' (e.g., migrants' remittances). The exchange of financial assets/liabilities between two different countries is considered a financial transaction (e.g., the issuance/redemption of a bond). This type of transactions give rise to an end-of-period stock, the International Investment Position. The International Investment Position is also inffuenced by other economic flows, such as revaluations (price changes or exchange rate changes) and other adjustments. Although transactions are characterized by the existence of an agreement (or compulsory transfers), other flows are driven by market conditions in the case of revaluations (the exchange rate market, for e.g.), or by other factors like the existence of a bankruptcy, de ned as other adjustments. The globalization has created very strong interdependences between nations based on economic linkages as, for example, international trade, among residents in di erent countries. Understanding the economic interactions established between one country and the rest of the world is crucial to support good policy making decisions and to prevent global economic and nancial crises. Nevertheless, analysing economic links at an aggregate level, may not re ect the existence of asymmetries at an individual level (between one country and its trade partners). Therefore, it is essential to complement the aggregate analysis, with an individual perspective focused on bilateral relationships between each economy and its partners. Since 2020, due to the pandemic Covid-19, international linkages like travel have diminished due to the existence of mobility restrictions, and new forms were strengthened (the e-Commerce for e.g.). Nevertheless, these restrictions will not last forever and new forms of international economic and nancial interactions will certainly exist in the future. The analysis of international linkages is crucial to (re)design the international trade and to promote the economic welfare. This thesis focuses on the aggregate and bilateral perspective of nancial and non- nancial interactions among the world economies and contributes to the literature in three di erent ways. Chapter 1 uses the methodology suggested by Fabiani et al. (2016) to compute cyclically-adjusted current account balances for the Portuguese economy in the period 1995-2017. The methodology makes use of domestic and foreign output gaps, export elasticities and the import content of domestic demand, distinguishing between cyclically-adjusted exports and imports. In addition, we compute the cyclically-adjusted bilateral exports and imports relative to the main Portuguese trade partners. We conclude that the strong current account adjustment observed in the Portuguese economy after 2010 was mainly non-cyclical, though a positive e ect resulting from cyclical developments was also observed. Chapter 2 computes the cyclical-adjusted trade account balances for a set of economies focusing on two distinct periods: before the 2008 global economic and nancial crisis and during this crisis. The methodology goes beyond the Chapter 1 methodology and uses a bilateral approach to measure the cyclically adjusted trade accounts. The results suggest that, although global imbalances reduced at a global level, there are asymmetric adjustments across countries. Moreover, the cyclical adjustment of the current account during the nancial crisis period was higher than in the previous years for many countries. On an individual basis, the United States plays the most important role of the bilateral cyclical adjustment. Finally, Chapter 3 considers cross-country linkages between banking sysii tems to assess the cascading e ects that emerge from shocks. Stylized shocks involve a reduction of liabilities from a banking system in a country towards others. The negative e ects on the net assets of other banking systems, if beyond a given threshold, will trigger a reduction of their own liabilities and the sequential propagation of the initial shock. No other endogenous economic e ects are considered. The stylized exercise uses data for cross-border assets and liabilities in a sample of twenty-four countries in 2018. Results highlight the United Kingdom as the most affected country in the event of a systemic shock in each of the G7 plus China group. Moreover, the stylized simulations indicate that the United States is the country whose potential shocks are the most powerful to affect aggregate world cross-border claims of banking systems. |
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