On March 28-29, CREI and CEPR jointly hosted the Third Annual Workshop on Global Interdependence at the Ciutadella Campus in Barcelona. The workshop presented the opportunity to share and discuss cutting-edge research related to issues in global integration and economic interdependence. It was sponsored by CREI and CEPR under the organization of professors Fernando Broner (GSE, CREI, UPF and CEPR) and Philippe Bacchetta (Study Center Gerzensee, Université de Lausanne and CEPR).
The 2-day event featured presentations by top economists on a variety of issues, including global imbalances and sustainability of current account deficit, macroeconomics of exchange rates, capital flows, international trade and outsourcing, international transmission of shocks, financial linkages within and across regions, challenges and opportunities for emerging markets, and multilateral institutions for an interdependent world.
Professor Mark Wright (UCLA) presents his research on capital flows
The workshop opened on March 28 with a short welcome on behalf of CREI and CEPR. The preliminary talks were given by Nicolas Coeurdacier (London Business School and CEPR) and Verónica Rappoport (Columbia Business School).
Following a coffee break in the newly opened CREI building—also site of the Barcelona GSE—a mid-morning talk was given by Gian Maria Milesi-Ferretti (IMF and CEPR), who discussed his paper "Where Did All the Borrowing Go? A Forensic Analysis of the U.S. External Position", joint with Philip R. Lane (IIIS, Trinity College Dublin and CEPR).
Milesi-Ferretti’s research examines the role played by net capital gains on the U.S. external portfolio and 'residual adjustments' in accounting for the discrepancy between the comparably small deterioration in the U.S. net external position in recent years relative to the extensive net borrowing,
Later in the day, Mark L. J. Wright (University of California, Los Angeles) presented his work "Where did Capital Flow? Fifty Years of International Rate of Return Differentials and Capital Flows", joint with Lee E. Ohanian (UCLA). In his paper he seeks to explain why low return geographic regions (such as Latin America) have received considerably more capital than high return regions (such as East Asia) despite the prediction of many standard models that capital should flow from countries with low marginal products of capital (MPKs) to countries with high MPKs.
Following a catered lunch, further talks were given by Giovanni Pica (CSEF Università degli Sudi di Salerno), Raphael Auer (Swiss National Bank), and Andrea Ferrero (FRB of New York).
Milessi-Ferretti (IMF and CEPR) discusses his research with a colleague
The second day of the workshop featured a morning presentation by Lutz Kilian (University of Michigan and CEPR) of his paper “Not All Oil Price Shocks Are Alike: Disentangling Demand and Supply Shocks in the Crude Oil Market”. Using a newly developed measure of monthly global real economic activity in industrial commodity markets, Professor Kilian proposes a structural composition of the real price of crude oil into three components: crude oil supply shocks; shocks to the global demand for all industrial commodities; and demand shocks that are specific to the global crude oil market. Using these components, he provides estimates of the dynamic effects of these shocks on the real price of oil and estimates of how much each of these shocks contributed to the evolution of the real price of oil during 1975-2005.
Other presenters that day included Julian di Giovanni (IMF), Martín González-Eiras (Universidad de San Andrés, Buenos Aires), Joachim Voth (GSE, UPF-ICREA, CREI and CEPR), Cedric Tille (University of Geneva and CEPR), and Emanuel Kohlscheen (University of Warwick).
Overall, the workshop drew 36 participants from top institutions—including 9 Affiliated Professors of the GSE. Universities and institutions represented included the IMF, Federal Reserve Bank of New York, European Central Bank, Columbia University, University of Chicago, HEC-Lausanne, UPF, IAE-CSIC, CREI, CEPR, and Barcelona GSE.
Joachim Voth (Barcelona GSE, UPF, CREI, and CEPR) was among the prestigious presenters
The workshop took place in the new CREI building, shared by the GSE, located on the Ciutadella campus