International finance

Financial globalization can have several potential positive impacts on developing countries.

A computer screen shows variations in the stock exchange. CC0 Creative Commons

International finance can help foster economic growth, boost trade, promote domestic financial sector development, and moderate domestic macroeconomic volatility. However, as recent developments clearly show, financial globalization can carry considerable risks. The volatility of international capital flows, in combination with inadequate macroeconomic policies and domestic governance, can make developing countries particularly vulnerable to banking crises and financial contagion, with devastating effects for the entire economy.

Using state-of-the-art qualitative and quantitative techniques and the latest macro-finance theories, this stream of work seeks to monitor the trends of private capital flows in the developing world, assess the increasing role of emerging market economies, and analyse the impacts of the new global financial architecture. By doing this, we aim to provide timely and evidence-based policy advice to policy makers, donors and researchers in both the developing and developed world.