Speaker: Ugochukwu Michael Anyanwu & Vivek Sharma, LUISS
Speaker: Ugochukwu Michael Anyanwu
Title: Greasing the revolving door: capital flows, corruption and economic growth
Abstract: Developing Countries lack good institutions, yet liberalization has been encouraged in these countries. We investigate the relationship between governance, capital flows and economic growth in Sub Saharan Africa.
Speaker: Vivek Sharma
Title: Sovereign Spread Volatility and Banking Sector
Abstract: Using BVAR-SV methods, we document that in late 2000s there were huge spikes in volatility of returns on Spanish sovereign debts. These volatility surges were concomitant with a sharp decline in bank credit to non-financial sector and a pronounced fall in real economic activity. We rationalize these results in a DSGE model where banks hold sovereign debt on their books. A rise in volatility of sovereign bond returns erodes banks' net worth which respond by slashing their lending to real sector. This increasing volatility of sovereign spreads dampens macroeconomy through its transmission by banks' balance sheets. Results from the model match our empirical findings.