Surges during sudden stops: Substitution effect between sectoral capital inflows in extreme episodes

Zheng Yang and Yu You

Economics Letters, 2023, vol. 230, issue C

Abstract: We empirically examine the correlation between extreme episodes of sectoral capital inflows, using a sample of 50 advanced and emerging economies from 2000Q1 to 2021Q4. We document that a sudden stop in one financial sector is often accompanied by a surge in another sector, especially in countries with well-developed financial market.

Keywords: Capital inflow; Surge; Sudden stop; Substitution effect; Financial development (search for similar items in EconPapers)
JEL-codes: F32 F34 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:230:y:2023:i:c:s0165176523002884

DOI: 10.1016/j.econlet.2023.111263

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