The International Monetary Fund is sponsoring a project on "Global Linkages" that will include a series of conferences in Washington, DC. This project is aimed at bringing together researchers from academia, the IMF, and other policy institutions to present and discuss new empirical research exploring how economic linkages between countries have changed over time. The project is also designed to explore the implications of changing global linkages for policy makers in developed and emerging markets.
An initial pre-conference to discuss the project was held on April 25-26, 2002, and a larger conference including a series of new research papers was held on January 30-31, 2003.
Key questions addressed by the project include:
What are the linkages by which country- and region-specific shocks are transmitted globally? Have these linkages become more important in recent years or have the underlying shock themselves become more global?
How has the balance shifted among cross-country linkages between real linkages (e.g. international trade) and financial linkages (e.g. capital flows)?
To what extent does the rise in comovement of real and financial series across countries reflect a long-term trend towards closer integration, a process that can be explained from fundamentals, and to what extent does it reflect short-term factors? In particular, has there been a rise in financial linkages that cannot be explained in terms of real (e.g. trade liberalization) and financial shocks (e.g. capital account liberalization)?
What is the role of firms (e.g. multinationals, FDI, mutual funds) versus individuals (e.g. falling transaction and information costs in portfolio diversification) in promoting the change in cross-border linkages?
What role have government policies played in the evolution of cross-border linkages and what policies should governments pursue going forward? Are short- and medium-run isolation strategies effective, given the changing nature of cross-country linkages? Do exchange rate regimes interact with real and financial linkages? Are there benefits to diversification across industries and commodities? Should policy coordination among the G-3 be enhanced to promote exchange rate stability and what would be the implications for emerging markets?
The original call for papers (a pdf file) with additional background information on the project