Exploring the determinants and dynamics of the current account balance is one of the priorities of academic literature and policy circles. Although the effects of structural variables are deeply analyzed, a lesser attention has been paid to the impact of financial variables. Drawing on standard...

During the past five years or so, most East Asian economies including the Philippines experienced a rising level of foreign exchange reserves and rapidly appreciating currencies both in nominal and real terms. One cause has been the resurgence of capital flows, which makes the issue of how to...

In this paper, I examine the effects of advanced economies' conventional monetary policy on gross foreign direct and portfolio investment inflows to emerging economies. I use structural vector autoregressions to analyse and compare the response of each inflow category to world interest rate and...

This paper analyses volatility, persistence, predictability, correlation, comovement (or contagion risk) and sudden stop (reversibility) of capital flows (foreign direct investment (FDI), foreign portfolio equity investment, long-term and short-term debt flows) using time series econometric...

Emerging markets have gained prominence as recipients of capital flows since the onset of the financial crisis in 2008. This raises their exposure and goes hand in hand with greater dependence on external financing and heightened sensitivity to global shocks. However, some differences can be...

The scarcity of up-to-date data is a meaningful constraint in the analysis of capital flows, especially for Emerging Markets (EMs). Indeed, the most commonly used source of cross-country data on capital flows is the Balance of Payments (BoP) statistics collected by the International Monetary...

Historical experience shows that in the world of high capital mobility, sudden stops of capital inflows may occur, typically triggering financial crises. The latest financial crisis in the euro zone (EZ) seems to support this point of view. Euro adoption encouraged a capital flow bonanza from...

The liberalization of the capital account of the balance of payments was one of the main reasons of the increasing amount of capital flows that came in into many emerging economies. In the last decades, the restrictions on these capital movements have been eliminated and the world has witnessed...

Interest rate differentials between China and the rest of the world provide an attractive target for currency carry trade strategies, but remains problematic due to existing capital controls. We focus on copper holdings as an asset used to facilitate the carry trade. Using a unique dataset of...

Capital flows data from Balance of Payments statistics often lag 3-6 months, which renders timely surveillance and policy deliberation difficult. To address the tension, we propose two coincident composite indicators for capital flows that improve upon existing proxies. We find that the most...