International gross capital flows: New uses of balance of payments data and application to financial crises

International gross capital flows: New uses of balance of payments data and application to financial crises

0.00 Avg rating0 Votes
Article ID: iaor2013448
Volume: 35
Issue: 1
Start Page Number: 16
End Page Number: 28
Publication Date: Jan 2013
Journal: Journal of Policy Modeling
Authors: ,
Keywords: finance & banking
Abstract:

Most studies of international financial openness and crises link economic performance to either the net inflow of capital or the gross inflow (outflow) defined as the change in foreign (domestic) holdings of domestic (foreign) assets over a period. In this paper we decompose the net inflow into four rather than two components. We show that the four‐way decomposition provides a better understanding of six recent financial crises and predicts sudden stops better than a standard two‐way decomposition. We conclude that four‐way decompositions can be more informative than either the net capital inflow or two‐way decompositions of the net inflow.

Reviews

Required fields are marked *. Your email address will not be published.