Financial Integration and Growth - Why Is Emerging Europe Different? (with Isabel Schnabel and Jeromin Zettelmeyer), Journal of International Economics, 2013, 89(2), 522-538.
Abstract: Using industry-level data, this paper tries to explain why financial integration raised growth differentials between externally dependent and less dependent industries in European transition countries, but not in other developing or advanced countries in the years preceding the current crisis. We argue that political integration with countries that have stronger political and economic institutions leads to growth-enhancing foreign investments because investors expect an improvement of institutions in the future. The empirical evidence supports the importance of political integration: within the group of developing countries, the effect of financial integration is larger in countries that are more strongly politically integrated. Such an effect is not found for advanced countries. Our results suggest that political integration can considerably increase the benefits of financial integration in developing countries, even when institutions are still weak.
Also: CEPR Discussion Paper, No. 8137, 2010; EBRD Working Paper, No. 123, 2010.
Global inflation dynamics in the post-crisis period: What explain the puzzles?, Economics Letters, 2016, 142, 31-34.
Abstract: Using a factor model, I estimate a global Phillips curve for 25 advanced countries over 1995Q1–2013Q3. I find that the inclusion of household inflation expectations in the Phillips curve helps to explain puzzling global inflation dynamics during the post-crisis period.
Also: Bank of Canada Staff Working Paper No. 36, 2014.