21 March 2013: DNB Macro Workshop - Financial Crisis and Business Cycles in General Equilibrium

The external stability of countries is traditionally assessed on the basis of net capital flows (or current account balances) and global current account imbalances are often mentioned as an important cause of the global financial crisis. The emergence of a global savings glut, due to excess savings in China and other emerging markets, led to large net capital flows towards advanced economies generating a global credit boom that then burst in 2007. Recent research, however, shows that the global credit boom was not so much fuelled by net inflows from emerging economies, but by gross inflows from financial sectors in advanced economies: the global banking glut. This suggests that gross capital flows also pose risks to financial stability, but these risks may be of a different size and nature and are not yet well understood.


The aim of this workshop is to bring together distinguished academics, policymakers and market participants to discuss the role of both net and gross capital flows in fuelling the pre-crisis credit boom and the policy lessons that can be drawn from this, both from an international macro-economic and from a banking perspective. Detailed information can be found in the program. Link to workshop flyer