Globalization, Gating, and Risk Finance

Chapters' Outline

The book is organized as follows.

Chapter 1, Globalization: Economies in Collision, provides a broad overview by introducing a selected number of problems motivating interest in global risk finance. This chapter provides a summary of foreign exchange (FX) markets, exchange rate regimes, and the evolution of reserve currencies from a macroeconomic perspective. We discuss the emergence of the Chinese yuan as a global exchange currency, its usage in global trade, and its inclusion in the International Monetary Fund’s basket of foreign currencies. Further discussion of the yuan is relegated to subsequent chapters. Chapter 1 further outlines the history of globalization and presents a list of special issues for further discussion.

Chapter 2, Data, Measurements, and Global Finance, provides a review of standard statistical measurement approaches commonly used in economics and finance. We discuss national accounts, big data and model‐less finance, technology and financial data, and data management. Particular attention is given to multivariate data and its treatment. For example, an introduction to data reduction and statistical measurement, principle component analysis, data modeling, copulas, implied volatility, autoregressive moving average, and related multivariate probability models are presented as an approach to the modeling and the study of global financial data. Autoregressive conditional heteroscedasticity (ARCH) and its extensions (generalized ARCH (GARCH), ...