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This study expands the empirical specification of Cerra and Saxena (2008), and allows short-term output growth regimes to be determined by globalization. Relying on a non-linear dynamic panel representation, it reconciles the earlier results in the literature regarding the two opposite narratives of the effects of globalization on output growth. Countries experience higher growth, on average, the more open and integrated they are into the world. However, once they reach a certain globalization threshold (endogenously estimated), countries may also experience a new normal, persistently lower short-term output growth following a financial crisis. The benefits, as well as vulnerabilities, accrue earlier in the globalization process for low- and middle-income countries. To solely reap the globalization benefits on growth, sound policies should be in place to mitigate the negative effects stemming from increased vulnerabilities brought by globalization.

Banks and Banking --- Finance: General --- Financial Risk Management --- Macroeconomics --- Globalization --- International Finance: General --- Economic Growth of Open Economies --- Globalization: Macroeconomic Impacts --- Globalization: Finance --- Globalization: General --- Financial Crises --- Macroeconomics: Production --- General Financial Markets: General (includes Measurement and Data) --- Economic & financial crises & disasters --- Finance --- Production growth --- Financial crises --- Banking crises --- Stock markets --- Production --- Financial markets --- Economic theory --- Stock exchanges --- United States

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We review the debate on the association of financial globalization with inequality. We show that the within-country distributional impact of capital account liberalization is context specific and that different types of flows have different distributional effects. Their overall impact depends on the composition of capital flows, their interaction, and on broader economic and institutional conditions. A comprehensive set of policies – macroeconomic, financial and labor- and product-market specific – is important for facilitating wider sharing of the benefits of financial globalization.

Currency crises --- Economic & financial crises & disasters --- Economic sectors --- Economics of specific sectors --- Economics --- Economics: General --- Financial crises --- Globalization: Economic Development --- Globalization: Finance --- Globalization: Macroeconomic Impacts --- Informal sector --- International Economics --- International Investment --- International Migration --- Long-term Capital Movements --- Macroeconomics --- Open Economy Macroeconomics --- Remittances

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This paper examines the effectiveness of capital outflow restrictions in a sample of 37 emerging market economies during the period 1995-2010, using a panel vector autoregression approach with interaction terms. Specifically, it examines whether a tightening of outflow restrictions helps reduce net capital outflows. We find that such tightening is effective if it is supported by strong macroeconomic fundamentals or good institutions, or if existing restrictions are already fairly comprehensive. When none of these three conditions is fulfilled, a tightening of restrictions fails to reduce net outflows as it provokes a sizeable decline in gross inflows, mainly driven by foreign investors.

Capital movements --- Capital flight --- Capital flows --- Capital inflow --- Capital outflow --- Flight of capital --- Flow of capital --- Movements of capital --- Balance of payments --- Foreign exchange --- International finance --- Econometric models. --- Econometrics --- Exports and Imports --- Industries: General --- Globalization: Finance --- International Investment --- Long-term Capital Movements --- Macroeconomics: Production --- Time-Series Models --- Dynamic Quantile Regressions --- Dynamic Treatment Effect Models --- Diffusion Processes --- International economics --- Econometrics & economic statistics --- Capital outflows --- Industrial production --- Capital controls --- Vector autoregression --- Production --- Econometric analysis --- Industries --- Malaysia

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Capital markets can improve risk sharing and the efficiency with which capital is allocated to the real economy, boosting economic growth and welfare. However, despite these potential benefits, not all countries have well developed capital markets. Moreover, government-led initiatives to develop local capital markets have had mixed success. This paper reviews the literature on the benefits and costs of developing local capital markets, and describes the challenges faced in the development of such markets. The paper concludes with a set of policy recommendations emerging from this literature.

Capital market --- Economic development --- Economic policy --- Law and legislation. --- Econometric models. --- Finance: General --- Business and Financial --- Investment --- Capital --- Intangible Capital --- Capacity --- Globalization: Finance --- General Financial Markets: General (includes Measurement and Data) --- Economic Development: General --- Financial Institutions and Services: General --- Corporation and Securities Law --- Finance --- Financial services law & regulation --- Securities markets --- Capital markets --- Stock markets --- Financial market infrastructure --- Securities regulation --- Financial markets --- Financial regulation and supervision --- Stock exchanges --- Financial services industry --- Nonbank financial institutions --- Law and legislation --- United States

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This paper studies the evolution of non-financial corporate debt among publicly listed companies in major advanced economies between 2010 and 2017. Since 2010, firms have started to rely more on corporate bond markets and have used part of their debt to increase their holdings of cash. In our sample of some 5,000 firms, we find substantial differences across countries, industries, firms, and years in leverage and debt maturity, and we also identify time factors that are common drivers of capital structures. Within countries, loosening an index of financial conditions seems to be associated with lengthening debt maturity after controlling for firms’ characteristics. Across firms and countries, leveraging and lengthening debt maturity have been greater where economic growth was stronger. Tighter financial conditions are positively associated with an increase in short-term debt financing. Quantile regressions suggest that there is substantial heterogeneity among firms on how they react to macro-financial conditions: large increases in long-term debt financing and large declines in short-term debt financing tend to be driven more by better macroeconomic performance, while large increases in short-term debt financing are more strongly impacted by tighter financial conditions. Since the paper uses data up to 2017, it does not reflect developments that occurred during the coronavirus pandemic. Nonetheless, sensitivity analysis shows that a significant amount of corporate debt, representing more than 5 percent of GDP, could be at risk in some countries, with an adverse spillover to the financial system if financial conditions tighten or economic growth slows down. This suggests that vulnerabilities should be closely monitored and policy action taken if warranted.

United States --- Exports and Imports --- Investments: Bonds --- Macroeconomics --- Corporate Finance and Governance: General --- Financial Crises --- Financial Markets and the Macroeconomy --- Globalization: Finance --- International Lending and Debt Problems --- General Financial Markets: General (includes Measurement and Data) --- International economics --- Investment & securities --- Economic & financial crises & disasters --- Debt financing --- Corporate bonds --- Debt service --- Bonds --- Global financial crisis of 2008-2009 --- External debt --- Financial institutions --- Financial crises --- Debts, External --- Global Financial Crisis, 2008-2009