Chapter 1 - The Global Financial Cycle

Miranda-Agrippino, S and Rey, H (2022) Chapter 1 - The Global Financial Cycle. In: Handbook of International Economics. Elsevier, pp. 1-43.

Abstract

We review the literature on the empirical characteristics of the global financial cycle and associated stylized facts on international capital flows, asset prices, risk aversion, and liquidity in the financial system. We analyze the co-movements of global factors in asset prices and capital flows with commodity prices, international trade, and world output as well as the sensitivity of different parts of the world to the Global Financial Cycle. We present evidence of the causal effects of the monetary policies of the US Federal Reserve, the European Central Bank, and of the People's Bank of China on the Global Financial Cycle. We then assess whether the 2008 financial crisis has altered the transmission channels of monetary policies on the Global Financial Cycle. Finally, we discuss the theoretical modeling of the Global Financial Cycle and avenues for future research.

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Item Type: Book Section
Subject Areas: Economics
Additional Information:

Rey is grateful to the ERC for funding (Advanced Grant 695722)

Funder Name: European Research Council
Date Deposited: 19 Apr 2022 11:25
Last Modified: 19 Apr 2022 11:27
URI: https://lbsresearch.london.edu/id/eprint/2510
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