P2: Private capital flows

International financial integration has deep impacts on developing economies. Most of these issues can be well treated at the macro level; however, some impacts clearly reach the micro level of people's daily life. Financial integration changes the risk-return profile of the national capital market and brings it closer to international standards, but it also generates new threats and uncertainties, both for macro stability as well as for households. While we take available research on the macroeconomic management of the economy as input, we go down to individual units, i.e., households (and firms). We analyze how they are affected by financial globalization and how they respond.