Search results for "Capital outflow"
showing 2 items of 2 documents
The effect of episodes of large capital inflows on domestic credit
2012
This paper analyses the effect of capital inflow surges on the evolution of domestic credit. Using a panel of developed and emerging economies from 1970 to 2007, it is shown that in the two years following the beginning of a capital inflow surge the credit-to-GDP ratio increases by about 2 percentage points. The effect is reversed in the medium-term with the credit-to-GDP ratio decreased by almost 4 percentage points seven years after the initial surge. The paper also finds that the effect is different depending on the type of flows characterising the episode (debt vs. portfolio equity vs. FDI), with large capital inflows that are debt-driven having the largest effect. The results of the pa…
Patterns of international capital flows and their implications for developing countries
2017
According to standard economic theory, capital should flow from rich to poor countries. However, a reverse pattern has prevailed in the world economy. This is the so-called Lucas paradox. In addition, it has been shown that, counterintuitively, there is a negative correlation between capital inflow and productivity growth across developing countries. This is the so-called allocation puzzle. This review sheds light on the following questions: “What are the patterns of international capital flows in the world economy?”, “What are the most plausible explanations for these patterns?”, and “What are the possible implications of these developments for developing countries?” In addition, the curre…