Hélène Rey

TL;DR: In this paper, the authors argue that the global financial cycle is not aligned with countries' specific macroeconomic conditions and propose a convex combination of targeted capital control, macroprudential control, and stricter limit on leverage for all financial intermediaries.

TL;DR: In this paper, the authors explore a new panel data set on bilateral gross cross-border equity flows between 14 countries, 1989-1996, and show that a "gravity" model explains international transactions in financial assets at least as well as goods trade transactions.

TL;DR: The authors applied a new approach to a new panel data set on bilateral gross cross-border equity flows between 14 countries, 1989-96, and found that the geography of information heavily determines the pattern of international transactions.

TL;DR: In this paper, the authors show that a gravity model explains international transactions in financial assets at least as well as goods trade transactions, and support the hypothesis that informational asymmetries are responsible for the strong negative relationship between asset trade and distance.

TL;DR: The authors developed an equilibrium model in which exchange rates, stock prices and capital flows are jointly determined under incomplete forex risk trading, showing that higher returns in the home equity market relative to the foreign equity market are associated with a home currency depreciation and net equity flows into the foreign market are positively correlated with a foreign currency appreciation.