Thesis (Ph. D.)--American University, 2003. / Includes bibliographical references (leaves 190-202).

Thesis (Ph. D.)--Harvard University, 1996. / Includes bibliographical references (leaves 314-328).

Thesis (Ph. D.)--University of North Carolina at Chapel Hill, 2005. / Includes bibliographical references (leaves 141-146).

Thesis (Ph. D.)--University of California, Santa Cruz, 2000. / Typescript. Includes bibliographical references (leaves 114-118).

.Most countries in the SADC region experience low levels of domestic savings. This calls for the need to explore other sources of financial flows to bridge the gap between domestic capital demand and supply, and one such source is external financial flows. It is with this background that this study examined the relationship between the different forms of external financial flows, domestic savings and economic growth in the SADC region for the period from 1980 to 2013. Firstly the study examined the impact of the different forms of external financial flows on economic growth in the region. The empirical results revealed that FDI, CBF and remittances have a significant impact on economic growth in the SADC region. ODA was however found to be insignificant. When the different types of external financial flows were interacted with institutions they all became significant in explaining economic growth in the region. The second aspect was to examine the extent to which external financial flows complement or displace domestic saving. The empirical results revealed that external financial flows with the exception of ODA complement domestic savings in the region. In addition, there is evidence of investment generating additional savings in the region, which is likely to be through the economic growth channel. The last objective of the study was to examine the determinants of external financial flows to the SADC region. The empirical results revealed that both push and pull factors are important in determining external financial flows in the region. Of great importance was the observation that events in the source country determine financial flows to the region. Proxy for financial integration was found to be positive though insignificant, pointing out that the region may not be benefiting from cross-border bank flows due to the region being disintegrated. This suggests that the region may benefit from increased cross-border bank flows if the region is integrated. Overall, the results from the study suggest that external financial flows are important to the region in providing the much needed development finance. However this also suggests that the foreign capital channel is another source in which a crisis from a developed country can be transmitted to the SADC region.

Thesis (MTech (Public Management))--Cape Peninsula University of Technology, 2011 / The study aims to assess how people in South Africa perceive the impact of the global financial crisis on the South African economy in the context of unemployment, poverty, crime, the mining, industrial, manufacturing and agricultural sectors, household expenditure, capital inflows, capital flows, capital outflow, electricity prices, education funding, health funding, remittances, pension funding, and financial institutions. From 2008 to 2010 the South African economy entered into recession because of the global financial crisis which was caused by the collapse of the United States’ housing market. A survey questionnaire which aimed to measure the perceptions of the impact of the global financial crisis on the South African economy was administrated to 300 randomly selected students and staff at two universities. A number of people were selected from the general public in Cape Town and at selected survey areas: two universities and five townships in Cape Town (Mandela Park, Hout Bay Harbour, Guguletu, Nyanga and Khayelitsha). The research followed the procedure of random sampling with students and staff at two universities in Cape Town and they were selected by the researcher and fieldworkers on an arbitrary basis. The employed field workers selected persons from the townships on the same basis. Results from the survey showed that a majority of respondents from universities and non-university subjects (170) agreed that the global financial crisis has impacted negatively on the South African economy in the context of unemployment, poverty, crime, the mining, industrial, manufacturing and agricultural sectors, capital inflows, capital flows, electricity prices, education funding, health funding, pension funding, and financial institutions. The survey questionnaire was designed according to the sample, which comprises staff and students at two universities in Cape Town, as well as, non-university subjects. This meant that many respondents included university staff and students because they are educated and have more knowledge and understanding than non-university subjects. This research found that non-university respondents were more unwilling to participate. The fieldworkers were also challenged to assess the perceptions of a large number of these respondents owing to a lack of language and cognitive skills. The research used two fieldworkers to assess the perceptions of university respondents concerning the impact of the global financial crisis on the South African economy. The research also used 14 fieldworkers to assess the perceptions of non-university respondents concerning the impact of the crisis on the South African economy. The cost of the fieldworkers’ remuneration was justified as the assessment process would have been extremely difficult for the researcher to have undertaken alone.

While the Impossible Trinity Theory (also known as the trilemma) has been widely recognized, due to its descriptive nature, very little has been done to test its validity empirically. This paper starts by comparing several recent constructions with regard to this matter and, after making some adjustments to the trilemma index invented by Aizenman et al. (2008), proves the validity of the Impossible Trinity Theory for developing countries. This paper then studies the empirical relationship between a country’s deviation from the average trilemma index and its economic performance. Empirical results find that while the overall deviation does not affect a country’s economic performance, individual deviations as well as regional factors are significant in determining unemployment and the real GDP growth rate.

Since the international debt crisis arose in 1982, various forms of debt relief measures have been applied by international creditors to alleviate the difficulties encountered by most developing countries in meeting their financial obligations. Renegotiation of external debts within the framework of official and private creditor clubs, however, has become the widely acceptable procedure in recent years. A sine qua non to this process is the entry by a debtor state into a stand-by arrangement with the International Monetary Fund. Compliance with the terms of the stand-by arrangement is closely linked, either in a formal or informal manner, to the enforcement of bilateral loan rescheduling agreements with creditor governments and syndicated loan agreements with private commercial banks. The crux of IMF financing is a commitment by a debtor state to implement economic policies aimed at improving the latter1s balance of payments position. However, the impact of these economic austerity measures upon the political stability of the debtor's government and the living standards of its citizens has generated an attitude of reluctance among the leaders of several developing countries to consult the IMF in accordance with current renegotiation procedures. In this thesis, the writer will examine the salient legal and political issues arising from the practice of international creditors in using compliance with the terms of the IMF stand-by arrangement as a parallel condition under their loan agreements with a debtor state. Three main arguments have been considered by this writer in shedding light upon this study. Firstly, the assumption that compliance with the terms of the IMF stand-by arrangement constitutes an international obligation is not in accord with the law and practice of the IMF. Any inference of breach entailing state responsibility, therefore, is unwarranted on account of the characterization of the IMF stand-by arrangement as a non-binding instrument. Secondly, a debtor state experiencing extreme economic hardship may be justified under international law to take unilateral action having the effect of deviating from the stand-by arrangement provisions. It will be argued in particular that the principle of "freedom for payments" embodied in stand-by arrangements is subject to an exception applying the rule of a state of necessity under international law. Finally, it will be argued that the political sustainability of economic adjustment for debtor states through the stand-by arrangements could be enhanced by incorporating human rights principles as a juridical standard for adjustment policies formulated in consultation with the IMF. / Law, Peter A. Allard School of / Graduate

This dissertation consists of three essays on international capital flows. The first chapter documents the accumulation of foreign exchange reserves and the simultaneous increase in the foreign direct investment (FDI) for emerging market economies. The second chapter discusses the performance of FDI firms and domestic firms in creating jobs using firm-level data from Orbis. The third chapter studies the proper exchange rate and monetary policy when emerging market economies denominate their external debt in foreign currencies. In Chapter 1, I study why emerging market economies hold high levels of foreign exchange reserves. I argue that foreign exchange reserves help emerging markets attract foreign direct investment. This incentive can play an important role when analyzing central banks' reserve accumulation. I study the interaction between foreign exchange reserves and foreign direct investment to explain the level of reserves using a small open economy model. The model puts the domestic entities and international investors in the same picture. The optimal level of the reserve-to-GDP ratio generated by the model is close to the level observed in East Asian economies. Additionally, the model generates positive co-movement between technology growth and the current account. This feature suggests that high technology growth corresponds to net capital outflow, because of the outflow of foreign exchange reserves in attracting the inflow of foreign direct investment, thus providing a rationale to the `allocation puzzle' in cross-economy comparisons. The model also generates positive co-movement between foreign exchange reserves and foreign debt, thus relating to the puzzle of why economies borrow and save simultaneously. In Chapter 2, joint work with Sakai Ando, we study whether FDI firms hire more employees than domestic firms for each dollar of assets. Using the Orbis database and its ownership structure information, we show that, in most economies, domestic firms tend to hire more employees per asset than FDI firms. The result remains robust across individual industries in the case study of the United Kingdom. The analysis shows that an ownership change itself (from domestic to foreign or vice versa) does not have an immediate impact on the employment per asset. This result suggests that different patterns of job creation seem to come from technological differences rather than from different ownership structures. In Chapter 3, I investigate how the devaluation of domestic currency imposes a contractionary effect on small open economies who have a significant amount of debt denominated in foreign currencies. Economists and policymakers express concern about the "Original Sin" situation in which most of the economies in the world cannot use their domestic currencies to borrow abroad. A devaluation will increase the foreign currency-denominated debt measured in the domestic currency, which will lead to contractions in the domestic economy. However, previous literature on currency denomination and exchange rate policy predicted limited or no contractionary effect of devaluation. In this paper, I present a new model to capture this contractionary devaluation effect with non-financial firms having foreign currency-denominated liabilities and domestic currency-denominated assets. When firms borrow from abroad and keep part of the asset in domestic cash or cash equivalents, the contractionary devaluation effect is exacerbated. The model can be used to discuss the performance of the economy in interest under exchange rate shocks and interest rate shocks. Future directions for empirically assessing the model and current literature are suggested. This assessment will thus provide policy guidance for economies with different levels of debt, especially foreign currency-denominated debt.

This dissertation studies topics in international finance and central bank policy. In the first chapter, "Common idiosyncratic volatility and carry trade returns", I provide new evidence that incomplete consumption risk sharing across countries is an important determinant of carry trade returns. I show that there is a strong co-movement in idiosyncratic volatilities over time, and that shocks to the common idiosyncratic volatility (CIV) factor, defined as the equally weighted average of the idiosyncratic volatilities in the cross-section, are priced. I find that high-interest rate currencies deliver low returns when the CIV increases, which are bad times for investors. Low-interest rate currencies provide a hedge by yielding positive returns. CIV shocks remain an empirically powerful risk factor in explaining the cross-section of carry trade returns after controlling for global foreign exchange (FX) volatility risk. Furthermore, CIV risk is correlated with cross-country income risk faced by households. My findings are consistent with a heterogeneous-agent model with persistent, uninsurable idiosyncratic shocks in consumption growth. The calibrated model quantitatively accounts for the cross-sectional differences in average returns across CIV-beta sorted portfolios for plausible market prices of CIV risk. In the second chapter, "Fed-implied market conditions", we propose a novel text processing technique to extract views of market conditions that are implicit in the Fed's policy statements and minutes. The method is easy to apply and addresses several problems inherent in the use of changes in interest rates as a proxy for central bank policy. First, we project market variables into the text of FOMC statements and minutes (separately) using support vector regressions (SVRs) to predict the levels of 10-year yields, 3-month yields, 2s10s, DXY index, VIX, high-yield (HY) and investment-grade (IG) spreads. We then define measures of monetary policy (``FDIF'' variables) as the Fed-implied deviation away from the market variable: the out-of-sample value of the market variable implied by the SVR minus the corresponding value of the market variable the day before the statement (minutes) release. We show that different markets respond differently to monetary policy news in the short-run, in a way that has independent and complementary implications for market movements in the long-run. Fed news also has important long-run implications for macroeconomic outcomes. Our Fed measures outperform Bernanke-Kuttner and changes in 2-year yields for forecasting macro and financial outcomes in the future. Finally, we show that there are Fed-risky and Fed-hedging industries, and these earn risk premia on Fed statement days. Finally, in the third chapter, "Does the counterparty of central banks in derivatives-based foreign exchange interventions matter?", we study how the central bank counterparty in foreign exchange interventions affect the supply of hedge against FX risks to the private sector. We use Brazilian data where derivatives-based interventions have been used in tandem for almost two decades. The analysis finds evidence of a link between central bank counterparties in FX swap operations and the supply of hedge through FX futures contracts. The main central bank counterparty in foreign exchange interventions uses the liquidity provided by the central bank to increase the supply of hedge to the private sector. Other counterparties use the US dollars provided by the central bank to reduce their own foreign exchange exposure.