Natural disasters and international financial flows: Global evidence. With Alex Bao (University of Bordeaux) and Whelsy Boungou (Paris School of Business) - Accepted for publication in the Review of World Economics (Link)

Abstract: This article investigates the impact of natural disasters on international financial flows. Specifically, we examine the impact of the number of individuals affected by natural disasters on capital flows, and their decomposition into equity-based and debt-based flows. Using data including more than 140 countries over the period 1990 to 2021, we infer that the intensity of natural disasters induces fewer capital flows to affected countries. This reduction in capital flows is mainly due to the impact on portfolio equity flows. We also show that these effects vary according to country-specific characteristics, institutional stability, and the type of natural disaster.

Keywords: Natural disasters, Financial flows, Equity, Debt.

International reserves accumulation and monetary policy autonomy: A nonlinear approach. Review of International Economics, Vol. 32, n°5, p. 2186-2225, 2024 (Link)

Abstract: In this article, the relationship between international reserves and monetary autonomy in 21 emerging countries during the period 1999–2019 is investigated. Using a nonlinear panel analysis, we find that international reserves begin to have a positive effect on monetary autonomy when the ratio of international reserves to GDP is around 22%–23%. This result implies that the levels of international reserves are not necessarily excessive in most emerging countries and appear appropriate for supporting their monetary autonomy. Above this threshold, we also identify that the exchange rate regime and financial liberalization are no longer constraints for monetary autonomy. This result suggests a partial validity of the trilemma in emerging countries, with that validity depending on the level of international reserves.

Keywords: Trilemma; international reserves accumulation; emerging countries; monetary policy; panel threshold regression.