The fundamental determinants of financial integration in the European Union

J.J.G. Lemmen, S.C.W. Eijffinger

Research output: Working paperDiscussion paperOther research output

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Abstract

This paper focuses on the fundamental determinants of the degree of financial integration in the European Union over the period 1973-1993. Using closed interest differentials to measure the intensity of capital controls and applying a panel data approach, we find realized inflation rates, government deficits, current account deficits and credits to the domestic economy to be significantly positively correlated with the intensity of capital export restrictions. In addition, low productivity in the business sector and low availability of sophisticated deposit instruments are positively related to the intensity of capital export controls. Consequently, remaining differences in national economic and financial structures, should be of greater interest to policymakers.
Original languageEnglish
PublisherUnknown Publisher
Number of pages34
Volume1995-117
Publication statusPublished - 1995

Publication series

NameCentER Discussion Paper
Volume1995-117

Fingerprint

European Union
Financial integration
Financial structure
Government deficits
Politicians
Economic structure
Productivity
Inflation rate
Deposits
Capital controls
Business sector
Panel data
Export controls
Credit
Current account deficit

Keywords

  • Control
  • EU
  • Financial Integration
  • monetary economics

Cite this

Lemmen, J. J. G., & Eijffinger, S. C. W. (1995). The fundamental determinants of financial integration in the European Union. (CentER Discussion Paper; Vol. 1995-117). Unknown Publisher.
Lemmen, J.J.G. ; Eijffinger, S.C.W. / The fundamental determinants of financial integration in the European Union. Unknown Publisher, 1995. (CentER Discussion Paper).
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Lemmen, JJG & Eijffinger, SCW 1995 'The fundamental determinants of financial integration in the European Union' CentER Discussion Paper, vol. 1995-117, Unknown Publisher.

The fundamental determinants of financial integration in the European Union. / Lemmen, J.J.G.; Eijffinger, S.C.W.

Unknown Publisher, 1995. (CentER Discussion Paper; Vol. 1995-117).

Research output: Working paperDiscussion paperOther research output

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N2 - This paper focuses on the fundamental determinants of the degree of financial integration in the European Union over the period 1973-1993. Using closed interest differentials to measure the intensity of capital controls and applying a panel data approach, we find realized inflation rates, government deficits, current account deficits and credits to the domestic economy to be significantly positively correlated with the intensity of capital export restrictions. In addition, low productivity in the business sector and low availability of sophisticated deposit instruments are positively related to the intensity of capital export controls. Consequently, remaining differences in national economic and financial structures, should be of greater interest to policymakers.

AB - This paper focuses on the fundamental determinants of the degree of financial integration in the European Union over the period 1973-1993. Using closed interest differentials to measure the intensity of capital controls and applying a panel data approach, we find realized inflation rates, government deficits, current account deficits and credits to the domestic economy to be significantly positively correlated with the intensity of capital export restrictions. In addition, low productivity in the business sector and low availability of sophisticated deposit instruments are positively related to the intensity of capital export controls. Consequently, remaining differences in national economic and financial structures, should be of greater interest to policymakers.

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KW - EU

KW - Financial Integration

KW - monetary economics

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BT - The fundamental determinants of financial integration in the European Union

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Lemmen JJG, Eijffinger SCW. The fundamental determinants of financial integration in the European Union. Unknown Publisher. 1995. (CentER Discussion Paper).