Financial globalization in emerging markets: overhyped growth, limited benefits.
Financial globalization in emerging markets has not been growing as much as previously thought. In the 2000s, it has only slightly increased, with limited international portfolio diversification. This has not led to significant benefits like consumption smoothing or amplifying global financial shocks. Instead, it has mainly helped deepen domestic markets during good times. Financial dedollarization has mostly been due to undoing financial offshoring and real appreciation effects.