Global Imbalances, Oil Revenues and Capital Flows to Emerging Market Countries

Bank Recycling of Petro Dollars to Emerging Market Economies During the Current Oil Price Boom

“…Few other pieces of analysis share-to the author's knowledge-this specific focus. An important exception is Boorman (2006), who draws similar conclusions as this paper but does so on the basis of simple descriptive statistics that would, in principle, also allow alternative interpretations. A recent paper by McGuire and Tarashev (2008) also contains some information on petro dollar bank flows, but falls short of identifying the final recipients of these flows.…”

Bank Recycling of Petro Dollars to Emerging Market Economies During the Current Oil Price Boom

“…As explained in section III, the investment behavior of depositors on the one hand and of banks on the other cannot be distinguished from these data alone. 199619971998199920002001200220032004200520062007Model Q2 2001-Q4 2006Model Q1 1996-Q3 2007 the coefficient for non-BIS reporting oil exporters, which is almost unity for a regression starting in Q2 1998. Moreover, the standard errors are wellbehaved when the start date is sequentially advanced to Q2 2001, decreasing with additional observations.…”

The Current Financial Crisis

“…They were the result of more fundamental distortions in the macroeconomic underpinnings of some of the largest economies in the world-not least the excessive saving rates in much of Asia and in some of the oil exporting countries, and the fi scal defi cits and inadequate private savings rates in the US and elsewhere. This issue was discussed in a meeting of the Global Emerging Markets Forum in Jakarta, Indonesia in September, 2006 (Boorman 2006). Among other things, that discussion pointed to the unusually diffi cult adjustment these imbalances would force on the global economy in the event of problems emerging in the fi nancial system.…”