Leverage cycles, growth shocks, and sudden stops in capital inflows

Lorenz Emter

International Review of Economics & Finance, 2023, vol. 84, issue C, 711-731

Abstract: Using a quarterly panel of 98 advanced as well as emerging and developing countries from 1990 to 2018, this paper examines covariates of sudden stops in capital inflows. It shows that domestic variables are related to the probability of incurring sharp reversals in capital inflows controlling for global push factors. In particular, negative growth shocks combined with high levels of leverage in the domestic private sector are significantly correlated with sudden stops. This is in line with real business cycle models including an occasionally binding credit constraint and income trend shocks.

Keywords: International capital flows; Sudden stops; Financial stability (search for similar items in EconPapers)
JEL-codes: E32 F30 F32 F34 G15 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1059056022003033
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Leverage Cycles, Growth Shocks, and Sudden Stops in Capital Inflows (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:84:y:2023:i:c:p:711-731

DOI: 10.1016/j.iref.2022.11.029

Access Statistics for this article

International Review of Economics & Finance is currently edited by H. Beladi and C. Chen

More articles in International Review of Economics & Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().