Tinker, Taper, QE, Bye? The Effect of Quantitative Easing on Financial Flows to Developing Countries
This paper examines gross financial inflows to developing countries between 2000 and 2013, with a particular focus on the potential effects of quantitative easing policies in the United States and other high-income countries. The paper finds eviden...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2014/03/19303789/tinker-taper-qe-bye-effect-quantitative-easing-financial-flows-developing-countries http://hdl.handle.net/10986/17733 |
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okr-10986-17733 |
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oai_dc |
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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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English en_US |
| topic |
ACCOUNTING ALTERNATIVE INVESTMENTS ARBITRAGES ASSET CLASSES ASSET PRICE ASSET PURCHASE BALANCE OF PAYMENTS BALANCE OF PAYMENTS FLOWS BALANCE SHEET BALANCE SHEETS BANK ASSET BANK LENDING BANK LOANS BASIS POINT BASIS POINTS BENCHMARK BOND BOND FLOWS BOND FUNDS BORROWING COSTS CAPITAL FLOW CAPITAL FLOWS CAPITAL INFLOWS CAPITAL MOBILITY CENTRAL BANK CENTRAL BANK ASSET CENTRAL BANKS CHECKS CONTROL VARIABLES COST OF CAPITAL COUNTRY FIXED EFFECTS COUNTRY RISK COVARIANCE MATRIX CREDIBILITY CREDIT DEFAULT CREDIT DEFAULT SWAP CROSS-BORDER CAPITAL CUMULATIVE INFLOWS CURRENCY CURVE YIELD DEBT DEBT BURDEN DEFLATION DEPENDENT VARIABLE DEPRECIATIONS DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING ECONOMIES DEVELOPING ECONOMY DEVELOPMENT POLICY DUMMY VARIABLES ECONOMETRIC MODEL ECONOMETRICS ECONOMIC CONDITIONS ECONOMIC ENVIRONMENTS ECONOMIC RESEARCH ELASTICITY EMERGING ECONOMIES EMERGING MARKET EMERGING MARKET ECONOMIES EMERGING MARKETS EQUITIES EQUITY FLOWS EQUITY MARKET EQUITY MARKETS EQUITY PRICES EXCHANGE RATE EXCHANGE RATE APPRECIATION EXCHANGE RATES EXPANSIONARY MONETARY POLICY EXPLANATORY VARIABLES FEDERAL RESERVE FEDERAL RESERVE SYSTEM FINANCIAL ASSETS FINANCIAL CAPITAL FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL FLOW FINANCIAL FLOWS FINANCIAL INFLOWS FINANCIAL MARKET FINANCIAL MARKETS FISCAL POLICY FIXED EFFECT FIXED INCOME FORECASTS FOREIGN DIRECT INVESTMENT FOREIGN DIRECT INVESTORS FOREIGN EXCHANGE FOREIGN EXCHANGE RESERVES FOREIGN HOLDINGS FORWARD RATE FUTURE RESEARCH FUTURES FUTURES CONTRACT GDP GLOBAL CAPITAL GLOBAL CAPITAL FLOWS GLOBAL ECONOMIC PROSPECTS GLOBAL ECONOMY GLOBAL FUND GOVERNMENT BONDS GROWTH RATE GROWTH RATES HIGH-INCOME COUNTRIES INCOME INSTRUMENTS INDICATOR VARIABLE INDICATOR VARIABLES INFLATION INFLATION DIFFERENTIAL INFLATION DIFFERENTIALS INSTITUTIONAL INVESTOR INTEREST RATE INTEREST RATE DIFFERENTIAL INTEREST RATE DIFFERENTIALS INTEREST RATE SPREAD INTERNATIONAL BANK INTERNATIONAL BANK LENDING INTERNATIONAL ECONOMICS INTERNATIONAL EQUITY INTERNATIONAL FINANCE INTERNATIONAL FINANCIAL MARKETS INTERNATIONAL FINANCIAL STATISTICS INTERNATIONAL SETTLEMENTS INVESTABLE FUNDS INVESTING INVESTMENT ACTIVITY INVESTMENT ALTERNATIVE LIQUID ASSETS LIQUIDITY LIQUIDITY PREMIUM LOAN LONG BONDS LONG-TERM ASSETS LONG-TERM COST LONG-TERM INTEREST LONG-TERM INTEREST RATE LONG-TERM YIELDS M2 MACROECONOMIC VARIABLES MACROECONOMICS MARKET CONDITIONS MARKET EXPECTATIONS MARKET RETURNS MONETARY CONDITIONS MONETARY FUND MONETARY POLICIES MONETARY POLICY MONEY SUPPLY MORTGAGE MORTGAGE-BACKED SECURITIES MUTUAL FUNDS NOMINAL INTEREST RATE NOMINAL INTEREST RATES OPPORTUNITY COST OUTPUT POLITICAL ECONOMY POLITICAL RISK PORTFOLIO PORTFOLIO CAPITAL PORTFOLIO FLOW PORTFOLIO FLOWS PORTFOLIOS POST-CRISIS PERIOD PRIVATE BANKS PRIVATE CREDIT PUSH FACTORS RAPID EXPANSION REAL EFFECTIVE EXCHANGE RATES REAL EXCHANGE RATE REAL GDP REAL INTEREST REAL INTEREST RATE RETURN RETURNS RISKY ASSETS ROBUSTNESS CHECK ROBUSTNESS CHECKS SECONDARY MARKET SECONDARY MARKET TRANSACTIONS SECONDARY MARKETS SECURITIES SECURITIES MARKET SHORT-TERM BILLS SHORT-TERM INTEREST RATE SHORT-TERM INTEREST RATES SHORT-TERM RATES SLOWDOWN STANDARD DEVIATION STANDARD DEVIATIONS STOCK PRICES T-BILL T-BILL RATE TOTAL MARKET TRADE CREDIT TREASURIES TREASURY TREASURY BILL TREASURY BILL RATE TREASURY BILLS TREASURY NOTE TREASURY YIELDS UNCERTAINTY UNDERESTIMATES VARIANCE-COVARIANCE MATRIX VOLATILITY WEAK ASSET WITHDRAWAL WORLD DEVELOPMENT INDICATORS WORLD ECONOMY WORLD EQUITY WORLD EQUITY MARKETS WORLD MARKET WORLD MARKET INTEGRATION YIELD CURVE YIELD SPREADS |
| spellingShingle |
ACCOUNTING ALTERNATIVE INVESTMENTS ARBITRAGES ASSET CLASSES ASSET PRICE ASSET PURCHASE BALANCE OF PAYMENTS BALANCE OF PAYMENTS FLOWS BALANCE SHEET BALANCE SHEETS BANK ASSET BANK LENDING BANK LOANS BASIS POINT BASIS POINTS BENCHMARK BOND BOND FLOWS BOND FUNDS BORROWING COSTS CAPITAL FLOW CAPITAL FLOWS CAPITAL INFLOWS CAPITAL MOBILITY CENTRAL BANK CENTRAL BANK ASSET CENTRAL BANKS CHECKS CONTROL VARIABLES COST OF CAPITAL COUNTRY FIXED EFFECTS COUNTRY RISK COVARIANCE MATRIX CREDIBILITY CREDIT DEFAULT CREDIT DEFAULT SWAP CROSS-BORDER CAPITAL CUMULATIVE INFLOWS CURRENCY CURVE YIELD DEBT DEBT BURDEN DEFLATION DEPENDENT VARIABLE DEPRECIATIONS DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING ECONOMIES DEVELOPING ECONOMY DEVELOPMENT POLICY DUMMY VARIABLES ECONOMETRIC MODEL ECONOMETRICS ECONOMIC CONDITIONS ECONOMIC ENVIRONMENTS ECONOMIC RESEARCH ELASTICITY EMERGING ECONOMIES EMERGING MARKET EMERGING MARKET ECONOMIES EMERGING MARKETS EQUITIES EQUITY FLOWS EQUITY MARKET EQUITY MARKETS EQUITY PRICES EXCHANGE RATE EXCHANGE RATE APPRECIATION EXCHANGE RATES EXPANSIONARY MONETARY POLICY EXPLANATORY VARIABLES FEDERAL RESERVE FEDERAL RESERVE SYSTEM FINANCIAL ASSETS FINANCIAL CAPITAL FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL FLOW FINANCIAL FLOWS FINANCIAL INFLOWS FINANCIAL MARKET FINANCIAL MARKETS FISCAL POLICY FIXED EFFECT FIXED INCOME FORECASTS FOREIGN DIRECT INVESTMENT FOREIGN DIRECT INVESTORS FOREIGN EXCHANGE FOREIGN EXCHANGE RESERVES FOREIGN HOLDINGS FORWARD RATE FUTURE RESEARCH FUTURES FUTURES CONTRACT GDP GLOBAL CAPITAL GLOBAL CAPITAL FLOWS GLOBAL ECONOMIC PROSPECTS GLOBAL ECONOMY GLOBAL FUND GOVERNMENT BONDS GROWTH RATE GROWTH RATES HIGH-INCOME COUNTRIES INCOME INSTRUMENTS INDICATOR VARIABLE INDICATOR VARIABLES INFLATION INFLATION DIFFERENTIAL INFLATION DIFFERENTIALS INSTITUTIONAL INVESTOR INTEREST RATE INTEREST RATE DIFFERENTIAL INTEREST RATE DIFFERENTIALS INTEREST RATE SPREAD INTERNATIONAL BANK INTERNATIONAL BANK LENDING INTERNATIONAL ECONOMICS INTERNATIONAL EQUITY INTERNATIONAL FINANCE INTERNATIONAL FINANCIAL MARKETS INTERNATIONAL FINANCIAL STATISTICS INTERNATIONAL SETTLEMENTS INVESTABLE FUNDS INVESTING INVESTMENT ACTIVITY INVESTMENT ALTERNATIVE LIQUID ASSETS LIQUIDITY LIQUIDITY PREMIUM LOAN LONG BONDS LONG-TERM ASSETS LONG-TERM COST LONG-TERM INTEREST LONG-TERM INTEREST RATE LONG-TERM YIELDS M2 MACROECONOMIC VARIABLES MACROECONOMICS MARKET CONDITIONS MARKET EXPECTATIONS MARKET RETURNS MONETARY CONDITIONS MONETARY FUND MONETARY POLICIES MONETARY POLICY MONEY SUPPLY MORTGAGE MORTGAGE-BACKED SECURITIES MUTUAL FUNDS NOMINAL INTEREST RATE NOMINAL INTEREST RATES OPPORTUNITY COST OUTPUT POLITICAL ECONOMY POLITICAL RISK PORTFOLIO PORTFOLIO CAPITAL PORTFOLIO FLOW PORTFOLIO FLOWS PORTFOLIOS POST-CRISIS PERIOD PRIVATE BANKS PRIVATE CREDIT PUSH FACTORS RAPID EXPANSION REAL EFFECTIVE EXCHANGE RATES REAL EXCHANGE RATE REAL GDP REAL INTEREST REAL INTEREST RATE RETURN RETURNS RISKY ASSETS ROBUSTNESS CHECK ROBUSTNESS CHECKS SECONDARY MARKET SECONDARY MARKET TRANSACTIONS SECONDARY MARKETS SECURITIES SECURITIES MARKET SHORT-TERM BILLS SHORT-TERM INTEREST RATE SHORT-TERM INTEREST RATES SHORT-TERM RATES SLOWDOWN STANDARD DEVIATION STANDARD DEVIATIONS STOCK PRICES T-BILL T-BILL RATE TOTAL MARKET TRADE CREDIT TREASURIES TREASURY TREASURY BILL TREASURY BILL RATE TREASURY BILLS TREASURY NOTE TREASURY YIELDS UNCERTAINTY UNDERESTIMATES VARIANCE-COVARIANCE MATRIX VOLATILITY WEAK ASSET WITHDRAWAL WORLD DEVELOPMENT INDICATORS WORLD ECONOMY WORLD EQUITY WORLD EQUITY MARKETS WORLD MARKET WORLD MARKET INTEGRATION YIELD CURVE YIELD SPREADS Lim, Jamus Jerome Mohapatra, Sanket Stocker, Marc Tinker, Taper, QE, Bye? The Effect of Quantitative Easing on Financial Flows to Developing Countries |
| relation |
Policy Research Working Paper;No. 6820 |
| description |
This paper examines gross financial
inflows to developing countries between 2000 and 2013, with
a particular focus on the potential effects of quantitative
easing policies in the United States and other high-income
countries. The paper finds evidence for potential
transmission of quantitative easing along observable
liquidity, portfolio balancing, and confidence channels.
Moreover, quantitative easing had an additional effect over
and above these observable channels, which the paper argues
cannot be attributed to either market expectations or
changes in the structural relationships between inflows and
observable fundamentals. The baseline estimates place the
lower bound of the effect of quantitative easing at around 5
percent of gross inflows (for the average developing
economy), which suggests that of the 62 percent increase in
inflows during 2009-13 related to changing global monetary
conditions, at least 13 percent of this was attributable to
quantitative easing. The paper also finds evidence of
heterogeneity among different types of flows; portfolio
(especially bond) flows tend to be more sensitive than
foreign direct investment to our measured effects from
quantitative easing. Finally, the paper performs simulations
that explore the potential effects of the withdrawal of
quantitative easing on financial flows to developing countries. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Lim, Jamus Jerome Mohapatra, Sanket Stocker, Marc |
| author_facet |
Lim, Jamus Jerome Mohapatra, Sanket Stocker, Marc |
| author_sort |
Lim, Jamus Jerome |
| title |
Tinker, Taper, QE, Bye? The Effect of Quantitative Easing on Financial Flows to Developing Countries |
| title_short |
Tinker, Taper, QE, Bye? The Effect of Quantitative Easing on Financial Flows to Developing Countries |
| title_full |
Tinker, Taper, QE, Bye? The Effect of Quantitative Easing on Financial Flows to Developing Countries |
| title_fullStr |
Tinker, Taper, QE, Bye? The Effect of Quantitative Easing on Financial Flows to Developing Countries |
| title_full_unstemmed |
Tinker, Taper, QE, Bye? The Effect of Quantitative Easing on Financial Flows to Developing Countries |
| title_sort |
tinker, taper, qe, bye? the effect of quantitative easing on financial flows to developing countries |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2014/03/19303789/tinker-taper-qe-bye-effect-quantitative-easing-financial-flows-developing-countries http://hdl.handle.net/10986/17733 |
| _version_ |
1764438218540843008 |
| spelling |
okr-10986-177332021-04-23T14:03:40Z Tinker, Taper, QE, Bye? The Effect of Quantitative Easing on Financial Flows to Developing Countries Lim, Jamus Jerome Mohapatra, Sanket Stocker, Marc ACCOUNTING ALTERNATIVE INVESTMENTS ARBITRAGES ASSET CLASSES ASSET PRICE ASSET PURCHASE BALANCE OF PAYMENTS BALANCE OF PAYMENTS FLOWS BALANCE SHEET BALANCE SHEETS BANK ASSET BANK LENDING BANK LOANS BASIS POINT BASIS POINTS BENCHMARK BOND BOND FLOWS BOND FUNDS BORROWING COSTS CAPITAL FLOW CAPITAL FLOWS CAPITAL INFLOWS CAPITAL MOBILITY CENTRAL BANK CENTRAL BANK ASSET CENTRAL BANKS CHECKS CONTROL VARIABLES COST OF CAPITAL COUNTRY FIXED EFFECTS COUNTRY RISK COVARIANCE MATRIX CREDIBILITY CREDIT DEFAULT CREDIT DEFAULT SWAP CROSS-BORDER CAPITAL CUMULATIVE INFLOWS CURRENCY CURVE YIELD DEBT DEBT BURDEN DEFLATION DEPENDENT VARIABLE DEPRECIATIONS DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING ECONOMIES DEVELOPING ECONOMY DEVELOPMENT POLICY DUMMY VARIABLES ECONOMETRIC MODEL ECONOMETRICS ECONOMIC CONDITIONS ECONOMIC ENVIRONMENTS ECONOMIC RESEARCH ELASTICITY EMERGING ECONOMIES EMERGING MARKET EMERGING MARKET ECONOMIES EMERGING MARKETS EQUITIES EQUITY FLOWS EQUITY MARKET EQUITY MARKETS EQUITY PRICES EXCHANGE RATE EXCHANGE RATE APPRECIATION EXCHANGE RATES EXPANSIONARY MONETARY POLICY EXPLANATORY VARIABLES FEDERAL RESERVE FEDERAL RESERVE SYSTEM FINANCIAL ASSETS FINANCIAL CAPITAL FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL FLOW FINANCIAL FLOWS FINANCIAL INFLOWS FINANCIAL MARKET FINANCIAL MARKETS FISCAL POLICY FIXED EFFECT FIXED INCOME FORECASTS FOREIGN DIRECT INVESTMENT FOREIGN DIRECT INVESTORS FOREIGN EXCHANGE FOREIGN EXCHANGE RESERVES FOREIGN HOLDINGS FORWARD RATE FUTURE RESEARCH FUTURES FUTURES CONTRACT GDP GLOBAL CAPITAL GLOBAL CAPITAL FLOWS GLOBAL ECONOMIC PROSPECTS GLOBAL ECONOMY GLOBAL FUND GOVERNMENT BONDS GROWTH RATE GROWTH RATES HIGH-INCOME COUNTRIES INCOME INSTRUMENTS INDICATOR VARIABLE INDICATOR VARIABLES INFLATION INFLATION DIFFERENTIAL INFLATION DIFFERENTIALS INSTITUTIONAL INVESTOR INTEREST RATE INTEREST RATE DIFFERENTIAL INTEREST RATE DIFFERENTIALS INTEREST RATE SPREAD INTERNATIONAL BANK INTERNATIONAL BANK LENDING INTERNATIONAL ECONOMICS INTERNATIONAL EQUITY INTERNATIONAL FINANCE INTERNATIONAL FINANCIAL MARKETS INTERNATIONAL FINANCIAL STATISTICS INTERNATIONAL SETTLEMENTS INVESTABLE FUNDS INVESTING INVESTMENT ACTIVITY INVESTMENT ALTERNATIVE LIQUID ASSETS LIQUIDITY LIQUIDITY PREMIUM LOAN LONG BONDS LONG-TERM ASSETS LONG-TERM COST LONG-TERM INTEREST LONG-TERM INTEREST RATE LONG-TERM YIELDS M2 MACROECONOMIC VARIABLES MACROECONOMICS MARKET CONDITIONS MARKET EXPECTATIONS MARKET RETURNS MONETARY CONDITIONS MONETARY FUND MONETARY POLICIES MONETARY POLICY MONEY SUPPLY MORTGAGE MORTGAGE-BACKED SECURITIES MUTUAL FUNDS NOMINAL INTEREST RATE NOMINAL INTEREST RATES OPPORTUNITY COST OUTPUT POLITICAL ECONOMY POLITICAL RISK PORTFOLIO PORTFOLIO CAPITAL PORTFOLIO FLOW PORTFOLIO FLOWS PORTFOLIOS POST-CRISIS PERIOD PRIVATE BANKS PRIVATE CREDIT PUSH FACTORS RAPID EXPANSION REAL EFFECTIVE EXCHANGE RATES REAL EXCHANGE RATE REAL GDP REAL INTEREST REAL INTEREST RATE RETURN RETURNS RISKY ASSETS ROBUSTNESS CHECK ROBUSTNESS CHECKS SECONDARY MARKET SECONDARY MARKET TRANSACTIONS SECONDARY MARKETS SECURITIES SECURITIES MARKET SHORT-TERM BILLS SHORT-TERM INTEREST RATE SHORT-TERM INTEREST RATES SHORT-TERM RATES SLOWDOWN STANDARD DEVIATION STANDARD DEVIATIONS STOCK PRICES T-BILL T-BILL RATE TOTAL MARKET TRADE CREDIT TREASURIES TREASURY TREASURY BILL TREASURY BILL RATE TREASURY BILLS TREASURY NOTE TREASURY YIELDS UNCERTAINTY UNDERESTIMATES VARIANCE-COVARIANCE MATRIX VOLATILITY WEAK ASSET WITHDRAWAL WORLD DEVELOPMENT INDICATORS WORLD ECONOMY WORLD EQUITY WORLD EQUITY MARKETS WORLD MARKET WORLD MARKET INTEGRATION YIELD CURVE YIELD SPREADS This paper examines gross financial inflows to developing countries between 2000 and 2013, with a particular focus on the potential effects of quantitative easing policies in the United States and other high-income countries. The paper finds evidence for potential transmission of quantitative easing along observable liquidity, portfolio balancing, and confidence channels. Moreover, quantitative easing had an additional effect over and above these observable channels, which the paper argues cannot be attributed to either market expectations or changes in the structural relationships between inflows and observable fundamentals. The baseline estimates place the lower bound of the effect of quantitative easing at around 5 percent of gross inflows (for the average developing economy), which suggests that of the 62 percent increase in inflows during 2009-13 related to changing global monetary conditions, at least 13 percent of this was attributable to quantitative easing. The paper also finds evidence of heterogeneity among different types of flows; portfolio (especially bond) flows tend to be more sensitive than foreign direct investment to our measured effects from quantitative easing. Finally, the paper performs simulations that explore the potential effects of the withdrawal of quantitative easing on financial flows to developing countries. 2014-04-10T20:21:07Z 2014-04-10T20:21:07Z 2014-03 http://documents.worldbank.org/curated/en/2014/03/19303789/tinker-taper-qe-bye-effect-quantitative-easing-financial-flows-developing-countries http://hdl.handle.net/10986/17733 English en_US Policy Research Working Paper;No. 6820 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |