Global Economic Divergence and Portfolio Capital Flows to Emerging Markets

Zeyyad Mandalinci () and Haroon Mumtaz

Journal of Money, Credit and Banking, 2019, vol. 51, issue 6, 1713-1730

Abstract: This paper studies the role of global and regional variations in economic activity and policy in developed world in driving portfolio capital flows (PCFs) to emerging markets (EMs). Results suggest that PCFs to EMs depend mainly on economic activity at the global level and monetary policy in America and Asia, positively on the former and negatively on the latters. PCFs are procyclical with respect to global activity, but countercyclical to regional activity. In aggregate, regional variations contribute more than global variations. This implies that economic divergence in the developed world can have significant effects on EMs via PCFs.

Date: 2019
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https://doi.org/10.1111/jmcb.12576

Related works:
Working Paper: Global Economic Divergence and Portfolio Capital Flows to Emerging Markets (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:wly:jmoncb:v:51:y:2019:i:6:p:1713-1730

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