Gross Capital Flows : Dynamics and Crises
This paper analyzes the behavior of international capital flows by foreign and domestic agents, dubbed gross capital flows, over the business cycle and during financial crises. We show that gross capital flows are very large and volatile, especially relative to net capital flows. When foreigners inv...
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| Format: | Journal Article |
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2013
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| Online Access: | http://hdl.handle.net/10986/16214 |
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okr-10986-162142021-04-23T14:03:28Z Gross Capital Flows : Dynamics and Crises Broner, Fernando Didier, Tatiana Erce, Aitor Schmukler, Sergio L. gross capital flows net capital flows domestic investors foreign investors crises This paper analyzes the behavior of international capital flows by foreign and domestic agents, dubbed gross capital flows, over the business cycle and during financial crises. We show that gross capital flows are very large and volatile, especially relative to net capital flows. When foreigners invest in a country, domestic agents invest abroad, and vice versa. Gross capital flows are also pro-cyclical. During expansions, foreigners invest more domestically and domestic agents invest more abroad. During crises, total gross flows collapse and there is a retrenchment in both inflows by foreigners and outflows by domestic agents. These patterns hold for different types of capital flows and crises. This evidence sheds light on the sources of fluctuations driving capital flows and helps discriminate among existing theories. Our findings seem consistent with crises affecting domestic and foreign agents asymmetrically, as would be the case under the presence of sovereign risk or asymmetric information. 2013-11-04T21:34:34Z 2013-11-04T21:34:34Z 2013-01 Journal Article Journal of Monetary Economics 0304‐3932 http://hdl.handle.net/10986/16214 en_US CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo/ World Bank Elsevier Publications & Research :: Journal Article Publications & Research |
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Digital Repository |
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Foreign Institution |
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Digital Repositories |
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World Bank Open Knowledge Repository |
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World Bank |
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en_US |
| topic |
gross capital flows net capital flows domestic investors foreign investors crises |
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gross capital flows net capital flows domestic investors foreign investors crises Broner, Fernando Didier, Tatiana Erce, Aitor Schmukler, Sergio L. Gross Capital Flows : Dynamics and Crises |
| description |
This paper analyzes the behavior of international capital flows by foreign and domestic agents, dubbed gross capital flows, over the business cycle and during financial crises. We show that gross capital flows are very large and volatile, especially relative to net capital flows. When foreigners invest in a country, domestic agents invest abroad, and vice versa. Gross capital flows are also pro-cyclical. During expansions, foreigners invest more domestically and domestic agents invest more abroad. During crises, total gross flows collapse and there is a retrenchment in both inflows by foreigners and outflows by domestic agents. These patterns hold for different types of capital flows and crises. This evidence sheds light on the sources of fluctuations driving capital flows and helps discriminate among existing theories. Our findings seem consistent with crises affecting domestic and foreign agents asymmetrically, as would be the case under the presence of sovereign risk or asymmetric information. |
| format |
Journal Article |
| author |
Broner, Fernando Didier, Tatiana Erce, Aitor Schmukler, Sergio L. |
| author_facet |
Broner, Fernando Didier, Tatiana Erce, Aitor Schmukler, Sergio L. |
| author_sort |
Broner, Fernando |
| title |
Gross Capital Flows : Dynamics and Crises |
| title_short |
Gross Capital Flows : Dynamics and Crises |
| title_full |
Gross Capital Flows : Dynamics and Crises |
| title_fullStr |
Gross Capital Flows : Dynamics and Crises |
| title_full_unstemmed |
Gross Capital Flows : Dynamics and Crises |
| title_sort |
gross capital flows : dynamics and crises |
| publisher |
Elsevier |
| publishDate |
2013 |
| url |
http://hdl.handle.net/10986/16214 |
| _version_ |
1764432527048572928 |