Boom-Bust Capital Flow Cycles

21 Pages Posted: 5 Jun 2019

See all articles by Graciela Kaminsky

Graciela Kaminsky

National Bureau of Economic Research (NBER); George Washington University - Department of Economics

Date Written: May 2019


This paper examines the new trends in research on capital flows fueled by the 2007-2009 Global Crisis. Previous studies on capital flows focused on current-account imbalances and net capital flows. The Global Crisis changed that. The onset of this crisis was preceded by a dramatic increase in gross financial flows while net capital flows remained mostly subdued. The attention in academia zoomed in on gross inflows and outflows with special attention to cross border banking flows before the crisis erupted and the shift towards corporate bond issuance in its aftermath. The boom and bust in capital flows around the Global Crisis also stimulated a new area of research: capturing the “global factor.” This research adopts two different approaches. The traditional literature on the push-pull factors, which before the crisis was mostly focused on monetary policy in the financial center as the “push factor,” started to explore what other factors contribute to the comovement of capital flows as well as to amplify the role of monetary policy in the financial center on capital flows to the periphery. This new research focuses on global banks’ leverage, risk appetite, and global uncertainty. Since the “global factor” is not known, a second branch of the literature has captured this factor indirectly using dynamic common factors extracted from actual capital flows or movements in asset prices.

Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at

Suggested Citation

Kaminsky, Graciela, Boom-Bust Capital Flow Cycles (May 2019). NBER Working Paper No. w25890. Available at SSRN:

Graciela Kaminsky (Contact Author)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

George Washington University - Department of Economics ( email )

Monroe Hall
2115 G Street, NW
Washington, DC 20052
United States
202-994-6686 (Phone)
202-994-6147 (Fax)


Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
PlumX Metrics