Global Economic Divergence and Portfolio Capital Flows to Emerging Markets
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Publisher
DOI
10.1111/jmcb.12576
Journal
Journal of Money, Credit and Banking
ISSN
0022-2879
Metadata
Show full item recordAbstract
This paper studies the role of global and regional variations in economic activity and policy in developed world in driving portfolio capital flows (PCFs) to emerging markets (EMs). Results suggest that PCFs to EMs depend mainly on economic activity at the global level and monetary policy in America and Asia, positively on the former and negatively on the latters. PCFs are procyclical with respect to global activity, but countercyclical to regional activity. In aggregate, regional variations contribute more than global variations. This implies that economic divergence in the developed world can have significant effects on EMs via PCFs.
Authors
MUMTAZ, H; MANDALINCI, ZCollections
- Economics and Finance [369]