The Geography of Capital Allocation in the Euro Area

Currencies of External Balance Sheets

“…Relative to these papers, we do a full breakdown of changes in the balance sheet by flows, valuation due to exchange rate movements and other changes (including asset prices and other statistical changes) and contrast the recent COVID-19 crisis and the global financial crisis. More recently, papers have used micro-data to document trends in global capital allocations, highlighting the role of currency of denomination of assets in international portfolios as well as tax havens and offshore financial centers (Maggiori et al 2020;Milesi-Ferretti et al 2023;Beck et al 2023;Florez-Orrego et al 2023). We view this paper as a complement to those studies.…”