Top

Published in:

2024 | OriginalPaper | Chapter

4. A Global Flow of Funds Perspective on Debt, Assets, and Imbalances

Authors : Nan Zhang, Yiye Zhang

Published in: Global Flow of Funds Analysis

Publisher: Springer Nature Singapore

Activate our intelligent search to find suitable subject content or patents.

search-config

AI-assisted search

Off

Abstract

This chapter establishes an analytical framework for examining the global flow of funds (GFF); expanding on the concept, research object, and analytical method for comprehending GFF. The structural changes of the G20, especially China–United States (US) decoupling, are examined alongside the possibility of a debt crisis using stock data to analyze the GFF matrix (GFFM) from 2018 to 2022. The financial network is used to analyze the basic characteristics and risks in the debt market between China (CN) and the US. Finally, CN’s and the US’ debt securities (DS) market positions and mutual financing relationships are analyzed using financial network technology. It also statistically estimates the impact of debt risk transmission. The issues of China–US are also observed in external financial assets and liabilities by stock data. By compiling the GFFM and using the financial network, we measure the risk exposure changes between CN and US external assets and liabilities, centrality, asset influence and liability sensitivity, and debt risk.

Dont have a licence yet? Then find out more about our products and how to get one now:

Springer Professional "Wirtschaft+Technik"

Online-Abonnement

Mit Springer Professional "Wirtschaft+Technik" erhalten Sie Zugriff auf:

über 102.000 Bücher
über 537 Zeitschriften

aus folgenden Fachgebieten:

Automobil + Motoren
Bauwesen + Immobilien
Business IT + Informatik
Elektrotechnik + Elektronik
Energie + Nachhaltigkeit
Finance + Banking
Management + Führung
Marketing + Vertrieb
Maschinenbau + Werkstoffe
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

inform now

Springer Professional "Technik"

Online-Abonnement

Mit Springer Professional "Technik" erhalten Sie Zugriff auf:

über 67.000 Bücher
über 390 Zeitschriften

aus folgenden Fachgebieten:

Automobil + Motoren
Bauwesen + Immobilien
Business IT + Informatik
Elektrotechnik + Elektronik
Energie + Nachhaltigkeit
Maschinenbau + Werkstoffe

Jetzt Wissensvorsprung sichern!

inform now

Springer Professional "Wirtschaft"

Online-Abonnement

Mit Springer Professional "Wirtschaft" erhalten Sie Zugriff auf:

über 67.000 Bücher
über 340 Zeitschriften

aus folgenden Fachgebieten:

Bauwesen + Immobilien
Business IT + Informatik
Finance + Banking
Management + Führung
Marketing + Vertrieb
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

inform now

previous chapter Structural Changes in China–US External Flow of Funds: Statistical Estimates Based on the VEC Model

next chapter A Network Analysis of the Sectoral From-Whom-To-Whom Financial Stock Matrix

Financial Stability Board and IMF (2009) “The Financial Crisis and Information Gaps”.

Errico et al. (2013, 2014).

Wall Street Journal (December 7, 2023) Moody’s Faces Growing Backlash Over Its Negative Outlook on China.

For the first version of the GFFM, see Zhang and Zhao (2019, 535–536).

As of 2020, the G20 members were Argentina (AR), AU, Brazil (BR), CA, CN, the EU, France (FR), IN, Indonesia (ID), Italy (IT), JP, Mexico (MX), Russia (RU), Saudi Arabia (SA), South Africa (ZA), Korea (KR), Turkey (TR), and the US. Singapore (SG) is a permanent guest invitee. Due to G20 restrictions, aside from FR, DE, and IT, which are also EU members, Switzerland (CH), Spain (ES), Luxembourg (LU), and the Netherlands (NL) were selected to represent the EU; therefore, the observations and analysis in this study include 24 countries and OE.

IMF (2023) Coordinated Portfolio Investment Survey, https://data.imf.org/regular.aspx?key=60587815.

See Zhang (2020, 312–313) for a detailed compilation method; its gist is in the Appendix.

Leontief (1941).

See Appendix: (2) for the calculation method of PDI and SDI in Chap. 2 for details.

BEA, Table 1.2. US NIIP at the End of the Period (March 29, 2022).

Acemoglu, D., Ozdaglar, A., & Tahbaz-Salehi, A. (2015). Systemic risk and stability in financial networks. American Economic Review, 105(2), 564–608.

Arajo, T., & Lou, F. (2007). The geometry of crashes: A measure of the dynamics of stock market crises. Quantitative Finance, 7(1), 63–74.MathSciNetCrossRef

Bavelas, A. (1950). Communication patterns in task-oriented groups. Journal of the Acoustical Society of America, 22(6), 725–730.CrossRef

BEA. (2022). U. S. Net International Investment Position at the End of the Period, Table 1.2.

Bernhard Winkler, Ad van Riet, and peter Bull. (2013a). A Flow-of-Funds Perspective on the Financial Crisis Volume I: Money, Credit and Sectoral Balance Sheets. Palgrave Macmillan.

Bernhard Winkler, Ad van Riet, and peter Bull. (2013b). A Flow-of-Funds Perspective on the Financial Crisis Volume II: Macroeconomic Imbalances and Risks to Financial Stability. Palgrave Macmillan.

BIS. (2009). Global Imbalances: In Midstream? In Reconstructing the World Economy, IMF Stuff Discussion Note, Dec. 22. Washington: International Monetary Fund.

BIS. (2022). Locational Banking Statistics, http://stats.bis.org/statx/toc/LBS.html.

Celestino, G., Marta, R. V., & Matas, A. (2018). Propagation of Quantity Shocks in Who-to-whom Networks’, the” 35th IARIW General Conference. Denmark.

Copeland, M. A. (1949). Social accounting for Moneyflows. Accounting Review, 24(3), 254–264.

Copeland, M. A. (1952). A study of Moneyflows in the United States. National Bureau for Economic Research Books.

Errico, L., Walton, R., Hierro, A., AbuShanab, & Amidžic, G. (2013). Global flow of funds: Mapping bilateral geographic flows. In Proceedings 59th ISI World Statistics Congress, 2825–2830.

Errico, L., Harutyunyan, A., Loukoianova, E., Walton, R., Korniyenko, Y., Amidžic, G., AbuShanab, H., & Shin, H. S. (2014). Mapping the shadow banking system through a global flow of funds analysis. IMF Working. https://www.imf.org/en/Publications/WP/Issues/2016/12/31/Mapping-the-Shadow-Banking-System-Through-a-Global-Flow-of-Funds-Analysis-41273. DC: paper P/14/10.Washington.

Financial Stability Board, and International Monetary Fund. (2009). The Financial Crisis and Information Gaps. Report to the G—20 Finance Ministers and Central Bank Governors. http://www.imf.org/external/np/g20/pdf/102909.pdf.

Freeman, L. C., Roeder, D., & Mulholland, R. R. (1979). Centrality in social networks: II. Experimental Results, Social Networks, 2(2), 119–141.

Gourinchas, P. O., Rey, H., & Sauzet, M. (2019). The international monetary and financial system, NBER WORKING PAPER SERIES”, Working Paper 25782. http://www.nber.org/papers/w25782.

Gourinchas, P. O., & Rey, H. (2007). International financial adjustment. Journal of Political Economy, 115(4), 665–703. https://doi.org/10.1086/521966CrossRef

IMF. (2014). BPM6 Compilation Guide vol. 144.

IMF. (2022a). Coordinated Direct Investment Survey (CDIS). https://data.imf.org/regular.aspx?key=60564262.

IMF. (2022b). Coordinated Portfolio Investment Survey (CPIS). https://data.imf.org/regular.aspx?key=60587815.

IMF. (2022c). International Investment Position. https://data.imf.org/regular.aspx?key=62805744.

IMF. (2022). World Economic Outlook Database April 2022.

IMF. (2023). Global debt monito.

Ishida, S. (1993). Flow of Funds in the Japanese Economy (in Japanese). Tokyo: Keizai Shimpo-Sha, 169–190.

Luiza, A. A. (2015). A network analysis of sectoral accounts: Identifying sectoral interlinkages in G-4 economies, IMF Working. Washington, DC: paper WP/15/111.

National Bureau of Statistics of China. (2022). China Statistical Yearbook 2022, China Statistics Press.

Newman, M. E. J. (2010). Networks: An introduction. Oxford University Press, 169.

Scott Davis, J., & Zlate, A. (2023). The global financial cycle and capital flows during the COVID-19 Pandemic. European Economic Review, 156, 104477. https://doi.org/10.1016/j.euroecorev.2023.104477.

Soramäki, K., & Cook, S. (2016). Network theory and financial risk. Risk Books, a Division of Incisive Media Investments Ltd.

Spelta, A., & Araújo, T. (2012a). The topology of cross-border exposures: Beyond the minimal spanning tree approach. Physica A: Statistical Mechanics and its Applications, 391(22), 5572–5583

Spelta, A., & Araújo, T. (2012b). Interlinkages and structural changes in cross-border liabilities: A network approach, Quaderni di Dipartimento, Working Paper, No. 181.

Tsujimura, K., & Tsujimura, M. (2008). International flow-of-funds analysis: Techniques and applications. Keio University Press, 3–59.

Tsujimura, M. (2009). The flow of funds analysis of the U.S. subprime crisis. Input-Output Analysis, 17, 1–2, 88–104. https://doi.org/10.11107/papaios.17.88.

Wall Street Journal. (2023). Moody’s Faces Growing Backlash Over Its Negative Outlook on China. https://www.wsj.com/world/china/moodys-faces-growing-backlash-over-its-negative-outlook-on-china-87fe7ce6

Zhang, N. (2022). Measuring global flow of funds: Who-to-whom matrix and financial network. Japanese Journal of Statistics & Data Science, 5(1), 899–942.MathSciNetCrossRef

Zhang, N., & Zhao, X. (2019). Measuring global flow of funds: A case study on China, Japan and the United States. Economic Systems Research, 31(4), 520–550. https://doi.org/10.1080/09535314.2019.1574719CrossRef

Zhang, N., & Zhu, L. (2021). Global flow of funds as a network: The case study of the G20. Japanese Journal of Monetary and Financial Economics, 9, 21–56.

Zhang, N. (2020). Flow of funds analysis: Innovation & development. Springer, 137–169.

Zhang, N. (2005). The theory and practice of global flow of funds (in Japanese), Minerva Shobo Inc. (in Japanese), 75–99.

Zhang, N. (2008). Global-flow-of-funds analysis in a theoretical model-what happened in China’s external flow of funds, Kyusyu University Press, quantitative analysis on contemporary. Economic Issues, 103–119.

Zhang, N. (2014). The flow of funds analysis in theory and practice. Pekin University Press (in Chinese), 1–65.

Title: A Global Flow of Funds Perspective on Debt, Assets, and Imbalances
Authors: Nan Zhang
Yiye Zhang
Publisher: Springer Nature Singapore
Book: Global Flow of Funds Analysis
Print ISBN: 978-981-9710-28-7

Electronic ISBN: 978-981-9710-29-4

Copyright Year: 2024
DOI: https://doi.org/10.1007/978-981-97-1029-4_4

Springer Professional

Abstract

Please log in to get access to your license.

Dont have a licence yet? Then find out more about our products and how to get one now:

Springer Professional "Wirtschaft+Technik"

Springer Professional "Technik"

Springer Professional "Wirtschaft"