P2: Private capital flows

PIs: Menkhoff (leading), Klasen, Vollmer, Wagener

International financial integration has deep impacts on developing economies. Most of these issues can be well treated at the macro level; however, some impacts clearly reach the micro level of people's daily life. Financial integration changes the risk-return profile of the national capital market and brings it closer to international standards, but it also generates new threats and uncertainties, both for macro stability as well as for households. While we take available research on the macroeconomic management of the economy as input, we go down to individual units, i.e., households (and firms). We analyze how they are affected by financial globalization and how they respond.

Possible dissertation topics:

  • Which risk measures do best forecast financially related behavior?
  • The impact of financial globalization and financial literacy on financial decisions of urban households
  • Financial globalization, financial literacy and households' investment choices and consumption smoothing
  • Triggering responsible financial behavior by affecting risk and time preferences
  • How does globalization affect access to credit for households and firms in developing countries?