Capital inflows implied real appreciation and short-term vulnerabilities

2019 ◽  
Keyword(s):  
Capital Inflows ◽  
Short Term ◽  
Real Appreciation

scholarly journals 28 Months Later: How Inflation Targeters Outperformed Their Peers in the Great Recession

2011 ◽  
Vol 11 (1) ◽  
Author(s):  
Irineu E de Carvalho Filho
Keyword(s):  
Interest Rates ◽  
Inflation Targeting ◽  
Global Financial Crisis ◽  
Trade Openness ◽  
Capital Inflows ◽  
Current Account Balance ◽  
Short Term ◽  
Cross Sectional ◽  
Trading Partners ◽  
The Global Financial Crisis

Twenty-eight months after the onset of the global financial crisis of August 2008, the evidence on post-crisis GDP growth emerging from a sample of 51 advanced and emerging countries is flattering for inflation targeting countries relative to their peers. The positive effect of IT is not explained away by plausible pre-crisis determinants of post-crisis performance, such as growth in private credit, ratios of short-term debt to GDP, reserves to short-term debt and reserves to GDP, capital account restrictions, total capital inflows, trade openness, current account balance and exchange rate flexibility, or post-crisis drivers such as the growth performance of trading partners and changes in terms of trade. We find that inflation targeting countries lowered nominal and real interest rates more sharply than other countries; were less likely to face deflation scares; and had sharp real depreciations without a relative deterioration in their risk assessment by markets. While the task of establishing causal relationships from cross-sectional macroeconomics series is daunting, our reading of this evidence is consistent with the resilience of IT countries being related to their ability to loosen their monetary policy when most needed, thereby avoiding deflation scares and the zero lower bound on interest rates.

scholarly journals Analysis on the Impact of Short-Term International Capital Flows on Chinese Stock Market on the Basis of VAR Model

2018 ◽  
Vol 10 (8) ◽  
pp. 77
Author(s):  
Ning Wu
Keyword(s):  
Stock Market ◽  
Capital Flows ◽  
Composite Index ◽  
International Capital Flows ◽  
Capital Inflows ◽  
Var Model ◽  
Chinese Stock Market ◽  
International Capital ◽  
Short Term ◽  
The Impact

With the continuous development of global economic integration and financial markets, international capital flows more and more frequently, the frequent flow of international capital will inevitably affect the yield of Chinese stock market. This article uses short-term international capital inflows SS and Shanghai composite index R as research objects. Based on monthly data from January 2002 to October 2017, VAR model was constructed using Eviews8.0 to study the impact of short-term international capital flows on Chinese stock market. Empirical studies have found that short-term international capital flow is the granger cause of changes in the Shanghai composite index yield, while the yield of Chinese stock market will not affect short-term international capital flows. At the end of this paper, relevant suggestions are put forward according to the conclusions.

scholarly journals Are House Prices Driven by Capital Flows? Evidence from Singapore

2016 ◽  
Vol 07 (01) ◽  
pp. 1650006 ◽  
Author(s):  
Hwee Kwan Chow ◽  
Taojun Xie
Keyword(s):  
Capital Flows ◽  
Price Index ◽  
House Prices ◽  
House Price ◽  
Capital Inflows ◽  
Residential Property ◽  
Foreign Direct Investments ◽  
Short Term ◽  
Property Price ◽  
The Impact

This paper investigates whether real house price appreciations can be attributed to the surge in real capital inflows into Singapore. We proxy capital flows by using the amount of Foreign Direct Investments (FDI) to real estate capturing the foreign purchases of property in Singapore which we deflate by the private residential property price index. Notwithstanding the absence of a cointegrating relationship, our results support the hypothesis that lagged short term fluctuations in capital inflows are positively associated with the growth rates of house prices over the last decade. We also provide evidence that macroprudential measures implemented by Singapore reduced the impact of capital inflows on house price appreciation by more than half, suggesting the effectiveness of such market cooling measures in weakening the credit growth channel.

scholarly journals The Interaction of Macroeconomic Variables on Capital Inflow in Emerging Market Countries in ASEAN: Panel Error Correction Model Approach

2019 ◽  
pp. 1357-1364
Author(s):  
Hasdi Aimon ◽  
Rika Utami Restihani ◽  
Anggi Putri Kurniadi
Keyword(s):  
Error Correction ◽  
Emerging Market ◽  
Error Correction Model ◽  
Capital Inflow ◽  
Capital Inflows ◽  
Short Term ◽  
Return To Equilibrium ◽  
Correction Model ◽  
Emerging Market Countries

This study investigates the short and long-term determinants of capital inflows in emerging market countries in ASEAN using the Panel Error Correction Model. This study uses panel data with a time series from 2000 to 2017 and a cross-section of five countries (Indonesia, Malaysia, Philippines, Thailand, and Vietnam). This study has three important findings. First, conditions of exchange rate, foreign reserve, and lending rate disrupt the equilibrium of capital inflow in the short term. Second, current account conditions disrupt the equilibrium in the long term. Third, capital inflow will return to equilibrium in the long term. Therefore, it is highly recommended for emerging market countries in ASEAN to stabilize the variables that disrupt the equilibrium in the long and short term to stabilize their capital inflow.

scholarly journals ANCAMAN CAPITAL INFLOW

INFORMASI ◽  
2011 ◽  
Vol 37 (1) ◽  
Author(s):  
Teguh Sihono ◽  
Rohaila Yusof
Keyword(s):  
Economic Growth ◽  
Central Bank ◽  
Foreign Exchange ◽  
Capital Inflow ◽  
Capital Inflows ◽  
Foreign Exchange Reserves ◽  
Short Term ◽  
Foreign Investors ◽  
Capital Assets ◽  
The Government

Capital inflow can be interpreted as an increase in the amount of money available from external or foreign sources for the purchase of local capital assets such as securities, houses, buildings, land, machinery. These short-term asset purchase, so if at any time be withdrawn in large quantities, it will endanger the country's economy. The swift flow of foreign funds may be a threat to the country which became the capital inflow in the form of options: pressure of inflation, high cost economy, the defisit Central Bank balance, the economic turbulence, and the threat of economic growth. Improvement of high economic growth accompanied by rising foreign exchange reserves that high also, it turns out is not free from the risk of unbridled inflation and economic cricis, destabilizing the economy during those funds withdrawn by foreign investors. For the avoidance of economic risk, should the government together with the Central Bank made a rule to direct capital inflow into the real sektor. Keywords: capital inflows, global likuiditas

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