The Real Effects of Financial (Dis)Integration: A Multi-Country Equilibrium Analysis of Europe

@inproceedings{Chakraborty2017TheRE,
  title={The Real Effects of Financial (Dis)Integration: A Multi-Country Equilibrium Analysis of Europe},
  author={Indraneel Chakraborty and Rong Hai and Hans Aasnes Holter and Serhiy Stepanchuk},
  year={2017}
}
Using data from 15 European Union economies, we quantify the real effects of supply-side frictions due to the financial disintegration of European countries since the 2008 financial crisis. We develop a multi-country general equilibrium model with heterogeneous countries and destination-specific financial frictions. Financial institutions allocate capital endogenously across countries, determining the cost of capital to firms and the wealth of nations. The cost of financial disintegration is… CONTINUE READING

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