INTERNATIONAL AND REGIONAL CAPITAL MOBILITY IN LATIN AMERICAN COUNTRIES

This study examines the role of global, regional and domestic saving for domestic investment financing in the panel of Latin American and Caribbean countries along with its three regional integration blocks, namely SICA, Andean Community and MERCOSUR. Panel regression and rolling-window estimation results reveal that global saving is the main source of domestic investment financing in the region of Latin America and the Caribbean, SICA, Andean Community and MERCOSUR. The role of domestic and regional savings is rather limited, implying that there are weak regional and domestic channels that can funnel domestic and regional savings into investment in the analysed samples. The importance of regional agreement saving is insignificant and decreases over the analysed period except for the Andean Community. The results indicate low financial integration of the member-countries within the three regional trade agreements.

Financial Integration in the Context of the European Union

As the world continues to see various facets of financial integration, the topic has sparked a great deal of discussions among policymakers and economists. The article analyzes benefits and risks of financial integration in the context of the European Union, which has facilitated global financial integration immensely by creating common currency among European Monetary Union countries and harmonizing regulations across the region. Upon examining main pros and cons of financial integration in detail, I conclude that financial integration can be beneficial in the longrun if corrective and preventive measures are enforced to curtail risks and threats it poses.

Corrigendum: Mobile money and regional financial integration: Evidence from sub-Saharan Africa

No abstract available.

Real Effective Exchange Rate Misalignment of the Tunisian dinar

In the Tunisian context, the issue of the misalignment of the real exchange rate has arisen for some time for some reason, a question that has intensified after the adoption of the floating regime. In this article, we will look at the assessment of the effects, if any, of the misalignment of the real effective exchange rate (REER) to its equilibrium value over the period from 1986 to 2015. The results show that the equilibrium level of the long-run exchange rate depends on productivity, the terms of trade and government spending. Two sub-periods are noted, that of a positive mismatch (undervaluation) from 1986 to 2003 followed by another negative mismatch (overvaluation) from 2004 to 2015. Such a result can be explained by the orientation of Tunisia towards the flexibility of the real exchange rate which in turn is likely to reduce the degree of imbalance of the real exchange rate. Similarly, the Tunisian authorities must adopt gradual reforms in their decisions on liberalization and financial integration and they are called upon to strengthen their trade and exchange policies to meet the challenge of the new international financial architecture. Finally, concerning the misalignment, we found the difference between the observed exchange rate and the equilibrium exchange rate is very low, especially since the implementation of the structural adjustment plan.

International Financial Integration and Stock Market in Developing Countries

Objective - This study examines the relation between stock market capitalization and international financial integration for 23 developing countries during 1996 - 2018. Methodology/Technique - By using recently developed econometric panel techniques. The present paper takes into consideration cross section and structural breaks. Findings - Our findings show several interesting results. First, the existence of a long run relationship between the stock market and financial integration, particularly when private capital flows are included. Second, with the presence of structural breaks the result shows that international financial integration has a negative impact on stock market, which means that financial integration loses its explanatory power over the crisis period. Novelty - There is no applied study on the verification of the volatility of international capital flows (foreign direct investments and remittances) in the analysis of the relationship between international financial integration and stock markets. Type of Paper - Empirical Keywords: Cointegration, Cross-Section, International Financial Integration, Panel Unit Root, Structural Breaks, Stock Market. JEL Classification: C23, C51, C58, F02, F21, F24, G01.