Current Account Imbalances and International Financial Integration

International capital flows expanded strongly before the global financial crisis, and current account imbalances accumulated in key economies. The crisis triggered a contraction in capital flows, which often forced a painful adjustment on countries running high external deficits. This special issue of the Journal of International Money and Finance consists of seven papers that offer novel empirical and theoretical perspectives on the implications of increasing financial integration for international capital flows, and for asset prices and real activity, in the context of both the global economy and the Euro Area. The financial crisis and the euro crisis figure prominently as potential watershed moments, in the studies collected here. All papers were presented at a conference held at the European Commission in Brussels on December 6-7, 2013, organized by the Journal of International Money and Finance, the European Commission, CEPR, ECARES, Tilburg University, the University of British Columbia, the University of Southern California and the University of Wisconsin.