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Patterns of financial change in the OECD area

Author

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  • H. VAN GEMERT

    (Tilburg University)

  • N. GRUIJTERS

    (Tilburg University)

Abstract

This paper measures the nature and determinants of financial change by studying interest rate differentials among OECD countries. First, a simple model illuminates the various determinants of international capital mobility. The framework is used to deduce the characteristics of three fundamentally different but analytically connected patterns of financial change: financial integration, asset substitution and monetary integration. Next, the empirical analysis aims at quantifying these patterns for two regions: the FizWorld and the FlexWorld, which differ as to their exchange rate commitment. The results are discussed against the background of some dominant institutional changes in the countries concerned. The policy implications are presented in a monetary policy conflict triangle.

Suggested Citation

  • H. Van Gemert & N. Gruijters, 1994. "Patterns of financial change in the OECD area," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 47(190), pages 271-294.
    • Handle: RePEc:psl:bnlaqr:1994:33
    as

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    File URL: http://ojs.uniroma1.it/index.php/PSLQuarterlyReview/article/view/10529/10414
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    References listed on IDEAS

    as
    1. Golub, Stephen S., 1990. "International capital mobility: net versus gross stocks and flows," Journal of International Money and Finance, Elsevier, vol. 9(4), pages 424-439, December.
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    4. McCormick, Frank, 1979. "Covered Interest Arbitrage: Unexploited Profits? Comment," Journal of Political Economy, University of Chicago Press, vol. 87(2), pages 411-417, April.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    interest rate; OECD; financial integration; asset substitution; monetary integration;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • F15 - International Economics - - Trade - - - Economic Integration
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)

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