The academic work of the Clausen Center is organized around four initiatives.
The first initiative, Financial Globalization, seeks to gain a better understanding of the complex and rapidly changing international financial landscape. As economies become more financially inter-twinned, researchers are reassessing the effectiveness of traditional macroeconomic policies, the cross-border spillover effects of macroeconomic and financial policies, and the desirability of coordinating policies internationally.
The second initiative, International Financial Architecture, explores issues associated with currency wars and the role of the US dollar as a reserve currency, the evolving nature of financial fragilities in advanced and developing nations, the regulation and supervision of financial institutions and markets, and the role of international organizations such as the International Monetary Fund in dealing with sovereign and external crises.
The third initiative on International Trade and Development seeks to understand the connection between economic integration and economic development. Economic integration with the rest of the world has been a central feature of rapid-growth experiences in the last decades, but many countries have not reaped the expected benefits. This initiative explores the conditions under which more open trade and investment policies promote development to better guide welfare-increasing policies.
The final initiative, International Business Education, supports the practice of international business and policy through executive education, and it stimulates academic dialogue by bringing business leaders and policy makers to the classroom. This initiative recognizes that business is shaped by international trade, foreign direct investment, cross-border portfolio flows, migration, and policies on intellectual property, regulations, and taxes. Executive education training on these issues enhances the ability of professionals working in the private and public sectors to make sound evaluations and decisions about global economic challenges.
Recent Working Papers
In Corporate Resilience to Banking Crises, (April 2016) Ross Levine, Chen Lin, Wensi Xie ask whether firms are more resilient to systemic banking crises in economies with higher levels of social trust. Using firm-level data in 34 countries from 1990 through 2011, they find that liquidity-dependent firms in high-trust countries obtain more trade credit and suffer smaller drops in profits and employment during banking crises than similar firms in low-trust economies. The results are consistent with the view that when banking crises block the normal banking-lending channel, greater social trust facilitates access to informal finance, cushioning the effects of these crises on corporate profits and employment.
In Tourism and Economic Development: Evidence from Mexico's Coastline (June 2016), Ben Faber and Cecile Gaubert investigate the long-run economic consequences of tourism, which is one of the most visible and fastest growing facets of globalization in developing countries. Their paper combines a rich collection of Mexican microdata with a quantitative spatial equilibrium model and a new empirical strategy. They begin by estimating a number of reduced-form effects on local economic outcomes in today's cross-section of Mexican municipalities. To base these estimates on plausibly exogenous variation in long-term tourism exposure, they exploit geological and oceanographic variation in beach quality along the Mexican coastline to construct instrumental variables. To guide the estimation of the aggregate implications of tourism, they write down a spatial equilibrium model of trade in goods and tourism services, and use the reduced-form moments to inform its calibration for counterfactual analysis. They find that tourism causes large and significant local economic gains relative to less touristic regions, and that these gains are in part driven by significant positive spillovers on manufacturing production. In the aggregate, however, they find that these local spillovers are largely offset by reductions in agglomeration economies among less touristic regions, so that the national gains from tourism are mainly driven by a classical market integration effect.