Volatility in International Capital Movements

Chris Becker and Clare Noone
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Chris Becker: Reserve Bank of Australia
Clare Noone: Reserve Bank of Australia

RBA Research Discussion Papers from Reserve Bank of Australia

Abstract: Conventional wisdom is that some capital flows are inherently more volatile than others. However, our investigation of the statistical properties of these flows shows that no regular relationships exist to suggest that the particular composition of capital flows can help to explain the overall stability of the external accounts. Instead, capital seems to come and go in different forms with few reliable patterns. We show that while industrialised economies have experienced a trend rise in the volatility of individual components in the capital account, this variability is largely offsetting. Such offsetting relationships appear less prevalent in emerging economies.

Keywords: capital flows; volatility; financial globalisation (search for similar items in EconPapers)
JEL-codes: F21 F32 F36 O16 O24 (search for similar items in EconPapers)
Date: 2009-12
New Economics Papers: this item is included in nep-ifn
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Persistent link: https://EconPapers.repec.org/RePEc:rba:rbardp:rdp2009-09

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