International Dollar Flows

Ayelen Banegas, Ruth A. Judson, Charles Sims and Viktors Stebunovs
Additional contact information
Ayelen Banegas: https://www.federalreserve.gov/econres/ayelen-banegas.htm
Ruth A. Judson: https://www.federalreserve.gov/econres/ruth-a-judson.htm
Viktors Stebunovs: https://www.federalreserve.gov/econres/viktors-stebunovs.htm

No 1144, International Finance Discussion Papers from Board of Governors of the Federal Reserve System (U.S.)

Abstract: Using confidential Federal Reserve data, we study the factors driving U.S. banknote flows between the United States and other countries. These flows are a significant component of capital flows in emerging market economies, where physical U.S. currency functions as a safe asset and precautionary demand for U.S. banknotes is a form of flight to quality. Prior to the global financial crisis, country-specific factors, including local economic uncertainty, largely explain the volume and heterogeneity of the flows. Since the crisis, global factors, particularly, global economic uncertainty, explain the flows markedly well. Further, precautionary demand for U.S. banknotes is not episodic.

Keywords: capital flows; currency flows; U.S. banknotes; safe assets; emerging market economies; economic uncertainty; flight to quality; capital flight; money demand (search for similar items in EconPapers)
JEL-codes: E40 E50 F30 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2015-09-09
New Economics Papers: this item is included in nep-ifn, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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http://dx.doi.org/10.17016/IFDP.2015.1144 http://dx.doi.org/10.17016/IFDP.2015.1144 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgif:1144

DOI: 10.17016/IFDP.2015.1144

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