Assessing the Effect of Quantitative Easing on Foreign Direct Investment in Brazil

Sahar Bahmani and Jeremy Toms

The American Economist, 2015, vol. 60, issue 2, 176-182

Abstract: Using econometric analysis, this paper examines the impact of quantitative easing undertaken by the Federal Reserve, on the level of foreign direct investment (FDI) in Brazil from the United States. This paper focuses on quantitative easing and U.S. investment abroad and its impact specifically on emerging economies, such as Brazil. This study finds that an increase in quantitative easing leads to an increase in capital flows from the U.S. into Brazil. It is found that Brazil's GDP, the U.S. monetary base, and the foreign exchange rate between the U.S. dollar and Brazilian real all have a strong impact on the level of foreign direct investment into Brazil. A substantial positive relationship between GDP and FDI is also established.

Keywords: quantitative easing; foreign direct investment; Federal Reserve; monetary policy; Brazil (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:sae:amerec:v:60:y:2015:i:2:p:176-182

DOI: 10.1177/056943451506000207

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