nep-tra New Economics Papers
on Transition Economics
Issue of 2008‒09‒05
one paper chosen by
J. David Brown
Heriot-Watt University

  1. Measuring and explaining the volatility of capital flows towards emerging countries By Carmen Broto; Javier Díaz-Cassou; Aitor Erce-Domínguez

  1. By: Carmen Broto (Banco de España); Javier Díaz-Cassou (Banco de España); Aitor Erce-Domínguez (Banco de España)
    Abstract: This paper analyzes the determinants of the volatility of different types of capital inflows to emerging countries. After calculating a variable that proxies capital flows volatility, we study its possible causality relations with a set of explanatory variables by type of flow through a panel data model. We show that in recent years the significance of global factors, beyond the control of emerging economies, has increased at the expense of that of country specific factors. In addition, various factors exhibit a non-robust effect on the volatility of the three different categories of capital flows, which poses additional challenges for policy-makers.
    Keywords: capital fl ows, volatility, panel data, emerging markets
    JEL: F21 F36 C22 C23
    Date: 2008–09

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