 Quantitative easing and the post-crisis surge in financial flows to developing countriesJamus Lim and Sanket Mohapatra Journal of International Money and Finance, 2016, vol. 68, issue C, 331-357 Abstract: This paper examines gross financial inflows to developing countries between 2000 and 2013, with a focus on the potential effects of quantitative easing (QE) policies in the United States and other high-income countries. We find evidence for potential transmission of QE along observable liquidity, portfolio balancing, and confidence channels. Moreover, we find that QE had an additional latent effect over and above these observable channels, one that survives an array of robustness tests, retains its significance across different types of financial flows, and which cannot be attributed to changes in expectations or elasticity. Our baseline estimates place the lower bound of a QE effect at around 5 percent of gross inflows above trend, for the average developing economy, which is a magnitude comparable to a one standard deviation change along the traditional channels. We also find evidence of heterogeneity among different types of flows; portfolio (especially bond) flows tend to be more sensitive than FDI to our measured QE effects. Keywords: Gross financial flows; Quantitative easing; Developing countries (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jimfin:v:68:y:2016:i:c:p:331-357 DOI: 10.1016/j.jimonfin.2016.02.009 Access Statistics for this article Journal of International Money and Finance is currently edited by J. R. Lothian More articles in Journal of International Money and Finance from Elsevier |
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