The Effect of the Global Financial Cycle on National Financial Cycles

Xin Tian
Additional contact information
Xin Tian: University of Groningen

No 2024007-GEM, Research Report from University of Groningen, FEB Research Institute (FEBRI)

Abstract: This paper examines whether a flexible exchange rate regime, capital controls,and foreign reserves are effective tools to reduce BRICS countries’ exposure toglobal financial cycle (GFCy) shocks. Based on local projections in which we allow the response of national financial cycles (NFCys) to the GFCy to vary, we observe that flexible exchange rate regime absorbs GFCy shocks in BRICS countries,as do tighter capital controls and larger international reserves. We also find thatthe responses of NFCys to GFCy shocks are heterogeneous across countries, withstronger effects observed in countries with higher inflation and GDP growth.

Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
https://hdl.handle.net/11370/4ec23016-fd41-4eab-9f10-b63470c4b7b1 (application/pdf)

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:gro:rugfeb:2024007-gem

Access Statistics for this paper

More papers in Research Report from University of Groningen, FEB Research Institute (FEBRI) Contact information at EDIRC.
Bibliographic data for series maintained by Hanneke Tamling ().