Abstract

http://ssrn.com/abstract=2020556
 
 

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Capital Flows, Cross-Border Banking and Global Liquidity


Valentina Bruno


American University - Department of Finance and Real Estate

Hyun Song Shin


Princeton University - Department of Economics

December 1, 2012

AFA 2013 San Diego Meetings Paper

Abstract:     
We investigate the role of global factors in driving cross-border capital flows. We formulate a model of gross capital flows through the banking sector and derive a closed form solution that highlights the leverage cycle of global banks and its interaction with recipient country characteristics. We test the predictions of our model in a panel study of 46 developed and emerging economies and find empirical support for the key predictions of our model.

Number of Pages in PDF File: 50

Keywords: Gross capital flows, leverage, credit booms and busts

JEL Classification: F32, F33, F34

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Date posted: March 13, 2012 ; Last revised: December 3, 2012

Suggested Citation

Bruno, Valentina and Shin, Hyun Song, Capital Flows, Cross-Border Banking and Global Liquidity (December 1, 2012). AFA 2013 San Diego Meetings Paper. Available at SSRN: http://ssrn.com/abstract=2020556 or http://dx.doi.org/10.2139/ssrn.2020556

Contact Information

Valentina Giulia Bruno
American University - Department of Finance and Real Estate ( email )
Kogod School of Business
4400 Massachusetts Ave., N.W.
Washington, DC 20016-8044
United States
Hyun Song Shin (Contact Author)
Princeton University - Department of Economics ( email )
Princeton, NJ 08544-1021
United States

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Citations:  12

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