International Capital Flows To Emerging And Developing Countries: National And Global Determinants
This paper examines international capital flows to emerging and developing countries. The authors assess whether commonalities exist, the permanence of shocks to commonalities and their determinants. Also, they consider individual country coherence with global capital flows and they measure the extent of co-movements in the volatility of capital flows. The results suggest there are commonalities in capital inflows, although aggregate or disaggregate capital flows respond differently to shocks. They find that the US long run real interest rate is an important determinant of global capital flows, and real commodity prices are relevant but to a lesser extent. They also find a role for human capital in explaining why some countries can successfully ride the wave of financial globalisation.