Projects by Focal Areas:
Trade, Investment, and Labor Policy
Property Rights and Global Innovation
Natural Resource Scarcity, Security, and Sustainability
Economic, Financial, and Political Crisis
Diaspora Investment and Entrepreneurship
Projects by Researcher:
Projects by Focal Areas: Economic, Financial, and Political Crises
Two Hundred Years of Financial Integration: Growth, Crises, and Financial Contagion
PI: Graciela Kaminsky, Professor, Department of Economics, CCAS
The last three decades have been witness to a dramatic process of globalization. This process of integration was warmly welcomed around the world since it was believed that financial integration allows capital to travel to its most attractive destination. But the boom in international capital flows of the 1990s ended with currency crises around the world. Again in the mid-2000s, international capital flows sharply increased, with the United States and Great Britain becoming the most important beneficiaries of this surge. This boom also ended with a collapse and worldwide crisis beginning in 2007 and we are now in the midst of a sovereign crisis in Europe. What went wrong? What should policy makers do? This project constructs a new database on international capital flows since the beginning of the 19th century to compare the boom-bust cycles during the heydays of financial integration before 1931 and the crises that followed them with those of the last three decades to understand the differences between crises that start in the financial centers (such as crises of 1929 and 2007) and those that start in the periphery (such as the Baring crisis of 1890 and Mexico crisis of 1994) as well as to assess the various channels of financial contagion and the policies should be implemented to reduce the spillovers of the crises.
Surviving the Global Financial Crisis: Firm Ownership, Organization and Establishment Performance
PI: Maggie Chen, Assistant Professor, Department of Economics, CCAS
This project examines the differential response of establishments during the global financial crisis. Using a new dataset that reports activities of over 12 million establishments around the world, the project investigates the role of firm ownership and organization in determining establishment performance during the crisis. The existing literature has so far shown an ambiguous relationship between foreign investment and economic growth at both the macro and the micro levels. The project disentangles the ambiguity by exploring three potential channels through which firm ownership and organization can affect establishment performance: (i) production linkage, (ii) financial linkage, and (iii) firm network. Preliminary evidence suggests that establishments with different ownership and organization structures exhibited sharply different responses. Multinational owned establishments performed, on average, better than their local counterparts, but the role of multinational owners hip can vary significantly with production and financial linkages and the size of firm organization network.