Do Surges in International Capital Inflows Influence the Likelihood of Banking Crises?

Julian Caballero

Economic Journal, 2016, vol. 126, issue 591, 281-316

Abstract: This article asks whether capital inflows bonanzas increase the probability of banking crises and whether this occurs through a lending boom mechanism. Results indicate that bonanzas more than triple the odds of a crisis, raising its probability to 14% (from an unconditional probability of 4%). This effect exists in the absence of a lending boom and is found in both net and gross inflows bonanzas. This effect is driven by portfolio‐equity and debt flows. While the effect of debt is channelled through excessive lending, the effect of portfolio‐equity flows is present even in the absence of a lending boom.

Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (116)

Downloads: (external link)
https://doi.org/10.1111/ecoj.12172

Related works:
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:wly:econjl:v:126:y:2016:i:591:p:281-316

Ordering information: This journal article can be ordered from
http://onlinelibrary ... 1111/(ISSN)1468-0297

Access Statistics for this article

Economic Journal is currently edited by Estelle Cantillon, Martin Cripps, Andrea Galeotti, Morten Ravn, Kjell G. Salvanes, Frederic Vermeulen, Hans-Joachim Voth and Rachel Kranton

More articles in Economic Journal from Royal Economic Society Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().