UID:
edoccha_9958077848202883
Format:
1 online resource (43 p.)
ISBN:
1-5135-7247-4
,
1-5135-5226-0
Series Statement:
IMF Working Papers
Content:
Using a newly developed dataset this paper examines the cyclicality of private capital inflows to low-income developing countries (LIDCs) over the period 1990-2012. The empirical analysis shows that capital inflows to LIDCs are procyclical, yet considerably less procyclical than flows to more advanced economies. The analysis also suggests that flows to LIDCs are more persistent than flows to emerging markets (EMs). There is also evidence that changes in risk aversion are a significant correlate of private capital inflows with the expected sign, but LIDCs seem to be less sensitive to changes in global risk aversion than EMs. A host of robustness checks to alternative estimation methods, samples, and control variables confirm the baseline results. In terms of policy implications, these findings suggest that private capital inflows are likely to become more procyclical as LIDCs move along the development path, which could in turn raise several associated policy challenges, not the least concerning the reform of traditional monetary policy frameworks.
Note:
Description based upon print version of record.
,
Cover; Abstract; Contents; I. Introduction; II. Existing Literature; A. Theoretical Underpinnings between Capital Flows and the Economic Cycle; B. Existing Empirical Work on the Cyclicality of Capital Flows; III. Stylized Facts; A. A New Database on Gross Capital Flows to LIDCs; B. A First Look at the Cyclicality of Private Capital Inflows in LIDCs; IV. Estimation; A. Estimable Equation; B. Control Variables; V. Baseline Results; VI. Robustness Checks; A. GMM Regressions; B. Countries with Surges in Capital Inflows; C. Risk-on, Risk-off Regimes
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D. Capital Inflows, Cyclical Fluctuations, and Trend ShocksE. Alternative Control Variables; F. Alternative Measures of the Dependent Variable; VII. Conclusions; References; Figures; 1. Comparison Between Ems and LIDCs by Percentile (% GDP); 2. Surges of Private Non-FDI Capital Flows (% of Total); 3. Capital Flows and the Cyclical Component of Output (1990-2012); 4. Amplitude of Private Inflows/GDP for Periods of Growth Above and Below the Median; Tables; 1. Fixed Effects Regerssions for Private Non-FDI Capital Flows; 2. GMM Regressions; 3. Regressions for Countries that Experience Surges
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4. Regressions with Time-Variant Unobservable Factors (CCEMG Estimator)5. Regressions Including Trend Growth; 6. Regressions with the Financial Reform Index; 7. Alternative Measures of Capital Flows; Appendices; A. Description of Selected Variables; B. Descriptive Statistics for Selected Variables; C. Descriptive Statistics for Non-Small Non-Fragile LIDCs; D. List of LIDC Countries and Classification
Additional Edition:
ISBN 1-5135-0814-8
Additional Edition:
ISBN 1-5135-4393-8
Language:
English
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