Working Paper: CEPR ID: DP8567
Authors: Pierre-Olivier Gourinchas; Hélène Rey; Kai Alexander Truempler
Abstract: This paper studies the geography of wealth transfers during the 2008 global financial crisis. We construct valuation changes on bilateral external positions in equity, direct investment and portfolio debt at the height of the crisis to map who benefited and who lost on their external exposure. We find a very diverse set of fortunes governed by the structure of countries' external portfolios. In particular, we are able to relate the gains and losses on debt portfolios to the country's exposure to ABCP conduits and the extent of dollar shortage.
Keywords: Global Financial Crisis; International Monetary System; Reserve Currency; Valuation Effects
JEL Codes: F32; F33
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Establishment of ABCP conduits (G24) | Greater losses on external debt portfolios (F65) |
| Dollar shortage (F31) | Higher valuation losses on external debt (F34) |
| Financial crisis (G01) | Deterioration of US net foreign asset position (F32) |
| Exposure to risky assets (G11) | Significant losses (G33) |
| Structure of external portfolios (G11) | Extent of losses (G33) |