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Gian Maria Milesi-Ferretti

Bio: Gian Maria Milesi-Ferretti is an academic researcher from International Monetary Fund. The author has contributed to research in topics: Current account & Exchange rate. The author has an hindex of 71, co-authored 184 publications receiving 21282 citations. Previous affiliations of Gian Maria Milesi-Ferretti include London School of Economics and Political Science & National Bureau of Economic Research.


Papers
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Journal ArticleDOI
TL;DR: In this article, the authors construct estimates of external assets and liabilities for 145 countries for the period 1970-2004, focusing on trends in net and gross external positions, and the composition of international portfolios.
Abstract: We construct estimates of external assets and liabilities for 145 countries for the period 1970-2004. We describe our estimation methods and present key features of the data at the country and the global level. We focus on trends in net and gross external positions, and the composition of international portfolios, distinguishing between foreign direct investment, portfolio equity investment, official reserves, and external debt. We document the increasing importance of equity financing and the improvement in the external position for emerging markets, and the differing pace of financial integration between advanced and developing economies. We also show the existence of a global discrepancy between estimated foreign assets and liabilities, and identify the asset categories that account for this discrepancy.

2,536 citations

Journal ArticleDOI
TL;DR: In this paper, the authors construct estimates of external assets and liabilities for 145 countries for 1970-2004, focusing on trends in net and gross external positions, and the composition of international portfolios.

2,030 citations

Posted Content
Abstract: Capital flows are closely monitored, but surprisingly little is known about the stocks of external assets and liabilities held by countries, especially in the developing world. This paper constructs estimates of foreign assets and liabilities and their equity and debt subcomponents for 66 industrial and developing countries for the period 1970-97. It explores the sensitivity of estimates of stock positions to the treatment of valuation effects not captured in balance of payments data. Finally, it characterizes the stylized facts of estimated stocks and asks whether there are trends in net foreign asset positions and differences in debt-equity ratios across countries.

666 citations

Posted Content
TL;DR: In this article, the authors study the effects of electoral institutions on the size and composition of public expenditure in OECD and Latin American countries and present a model emphasizing the distinction between purchases of goods and services and transfers, which are easier to target across social groups.
Abstract: We study the effects of electoral institutions on the size and composition of public expenditure in OECD and Latin American countries. We present a model emphasizing the distinction between purchases of goods and services, which are easier to target geographically, and transfers, which are easier to target across social groups. Voters have an incentive to elect representatives more prone to transfer spending in proportional systems. The model also predicts higher primary spending in proportional systems when the share of transfer spending is high. After defining rigorous measures of proportionality, we find considerable empirical support for our predictions.

642 citations

Journal ArticleDOI
TL;DR: Milesi-Ferretti and Tille as mentioned in this paper identify stylized facts and main drivers of the retrenchment in international capital flows and identify the stylized fact and main driver of this development.
Abstract: The current crisis saw an unprecedented collapse in international capital flows after years of rising financial globalization. We identify the stylized facts and main drivers of this development. The retrenchment in international capital flows is a highly heterogeneous phenomenon: first, across time, being especially dramatic in the wake of the Lehman Brothers’ failure; secondly, across types of flows, with banking flows being the hardest hit due to their sensitivity of risk perception; and thirdly, across regions, with emerging economies experiencing a shorter-lived retrenchment than developed economies. Our econometric analysis shows that the magnitude of the retrenchment in capital flows across countries is linked to the extent of international financial integration, its specific nature – with countries relying on bank flows being the hardest hit – as well as domestic macroeconomic conditions and their connection to world trade flows. — Gian-Maria Milesi-Ferretti and Cedric Tille

633 citations


Cited by
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Journal ArticleDOI
TL;DR: The authors argue that norms evolve in a three-stage "life cycle" of emergence, cascades, and internalization, and that each stage is governed by different motives, mechanisms, and behavioral logics.
Abstract: Norms have never been absent from the study of international politics, but the sweeping “ideational turn” in the 1980s and 1990s brought them back as a central theoretical concern in the field. Much theorizing about norms has focused on how they create social structure, standards of appropriateness, and stability in international politics. Recent empirical research on norms, in contrast, has examined their role in creating political change, but change processes have been less well-theorized. We induce from this research a variety of theoretical arguments and testable hypotheses about the role of norms in political change. We argue that norms evolve in a three-stage “life cycle” of emergence, “norm cascades,” and internalization, and that each stage is governed by different motives, mechanisms, and behavioral logics. We also highlight the rational and strategic nature of many social construction processes and argue that theoretical progress will only be made by placing attention on the connections between norms and rationality rather than by opposing the two.

5,761 citations

Journal ArticleDOI
TL;DR: In this article, a method that consistently and efficiently estimates a theoretical gravity equation and correctly calculates the comparative statics of trade frictions was developed to solve the famous McCallum border puzzle.
Abstract: Gravity equations have been widely used to infer trade flow effects of various institutional arrangements. We show that estimated gravity equations do not have a theoretical foundation. This implies both that estimation suffers from omitted variables bias and that comparative statics analysis is unfounded. We develop a method that (i) consistently and efficiently estimates a theoretical gravity equation and (ii) correctly calculates the comparative statics of trade frictions. We apply the method to solve the famous McCallum border puzzle. Applying our method, we find that national borders reduce trade between industrialized countries by moderate amounts of 20-50 percent.

4,997 citations

Posted Content
TL;DR: In this paper, the authors provide a unified and comprehensive theory of structural time series models, including a detailed treatment of the Kalman filter for modeling economic and social time series, and address the special problems which the treatment of such series poses.
Abstract: In this book, Andrew Harvey sets out to provide a unified and comprehensive theory of structural time series models. Unlike the traditional ARIMA models, structural time series models consist explicitly of unobserved components, such as trends and seasonals, which have a direct interpretation. As a result the model selection methodology associated with structural models is much closer to econometric methodology. The link with econometrics is made even closer by the natural way in which the models can be extended to include explanatory variables and to cope with multivariate time series. From the technical point of view, state space models and the Kalman filter play a key role in the statistical treatment of structural time series models. The book includes a detailed treatment of the Kalman filter. This technique was originally developed in control engineering, but is becoming increasingly important in fields such as economics and operations research. This book is concerned primarily with modelling economic and social time series, and with addressing the special problems which the treatment of such series poses. The properties of the models and the methodological techniques used to select them are illustrated with various applications. These range from the modellling of trends and cycles in US macroeconomic time series to to an evaluation of the effects of seat belt legislation in the UK.

4,252 citations

Journal ArticleDOI
TL;DR: The authors summarizes and explains the main events of the liquidity and credit crunch in 2007-08, starting with the trends leading up to the crisis and explaining how four different amplification mechanisms magnified losses in the mortgage market into large dislocations and turmoil in financial markets.
Abstract: This paper summarizes and explains the main events of the liquidity and credit crunch in 2007-08. Starting with the trends leading up to the crisis, I explain how these events unfolded and how four different amplification mechanisms magnified losses in the mortgage market into large dislocations and turmoil in financial markets.

3,033 citations

Journal ArticleDOI
TL;DR: In this article, the authors construct estimates of external assets and liabilities for 145 countries for the period 1970-2004, focusing on trends in net and gross external positions, and the composition of international portfolios.
Abstract: We construct estimates of external assets and liabilities for 145 countries for the period 1970-2004. We describe our estimation methods and present key features of the data at the country and the global level. We focus on trends in net and gross external positions, and the composition of international portfolios, distinguishing between foreign direct investment, portfolio equity investment, official reserves, and external debt. We document the increasing importance of equity financing and the improvement in the external position for emerging markets, and the differing pace of financial integration between advanced and developing economies. We also show the existence of a global discrepancy between estimated foreign assets and liabilities, and identify the asset categories that account for this discrepancy.

2,536 citations