Financial Globalization and Capital Flows in an Unbalanced World
Financial globalization has been accompanied by global imbalance – capital flows from capital abundant developed countries (mostly North) to capital scarce developing countries (mostly South) in net terms. The recent disaggregate data shows, however, that the global capital flows in fact feature a pattern of two-way capital flows – the risky equity (including FDI) assets flow from the North to the South countries while the safe bond assets flow the other way around.
The purpose of this research project is to better understand financial globalization and capital flows by developing a theoretical and quantitative model that is able to simultaneously account for both the global imbalances (a fact of net portfolio flows) and two-way capital flows (a fact of gross portfolio flows). The model can be further developed to better understand the policy issues of great importance and relevance to the existing world economy – optimal monetary, exchange-rate, and capital control policies pertaining to the countries of different characteristics (e.g. developed v.s. developing countries, debtor v.s. creditor countries, more open and integrated economies v.s. less open economies and those exiting from existing economic/trade agreements) in an economically interconnected but unbalanced world.
“Financial (de)globalization has different impacts on different countries. We aim to better understand its drivers so as to make sound and effective economic policies in face of a fast-changing economic landscape.”
“For better solutions to global challenges, we rely on not only policy coordination among nations, but also international collaboration in research and knowledge exchange. The Tandem fellowship offers an exciting opportunity for scientific exchange.”
Ning received his PhD in Economics from the University of St Andrews in 2015. Then, as a Royal Economic Society junior fellow, he spent one year working at the University of St Andrews on macroeconomic models with country portfolios. Ning has been a Lecturer in Macroeconomics at the University of Glasgow since August 2016.
Zhan received his PhD in Economics from Kiel University in 2014. He then held research positions at TU Dresden. Since March 2019, he has been working as an assistant professor at University of Göttingen. His main research fields, with a focus on applied microeconomic theory, are international economics and global value chains.