Determinants of Private Capital Flows in the 1970s and 1990s: Is There Evidence of Contagion?

26 Pages Posted: 13 Feb 2006

See all articles by Leonardo Hernández

Leonardo Hernández

Banco Central de Chile

Pamela Mellado

Ministry of Finance - Chile

Rodrigo Valdés

Central Bank of Chile; Ministry of Finance, Chile

Date Written: May 2001

Abstract

This paper studies the determinants of private capital flows to developing countries during the last two episodes of large inflows, the late 1970s-early 1980s and the 1990s. The paper also tests for contagion effects in capital flows among recipient countries, and tries to identify specific channels through which such effects can occur. It tests for neighborhood effects, trade-related effects, and for contagion based on the countries having similar macroeconomic indicators. The results show strong evidence for the first two effects during the 1990s, and indicate that the third effect varies depending on the type of capital flow.

Keywords: contagion, capital flows

JEL Classification: F30, F40, G15

Suggested Citation

Hernández, Leonardo and Mellado, Pamela and Valdés, Rodrigo O., Determinants of Private Capital Flows in the 1970s and 1990s: Is There Evidence of Contagion? (May 2001). IMF Working Paper No. 01/64, Available at SSRN: https://ssrn.com/abstract=879553

Leonardo Hernández (Contact Author)

Banco Central de Chile ( email )

Agustinas 1180
Santiago
Chile
56-2-670-2618 (Phone)
56-2-670-2106 (Fax)

Pamela Mellado

Ministry of Finance - Chile ( email )

Teatinos 120
Santiago, 8340487
Chile

Rodrigo O. Valdés

Central Bank of Chile ( email )

Agustinas 1180
Research Department
Santiago
Chile
+56 2 670 2000 (Phone)
+56 2 670 2231 (Fax)

Ministry of Finance, Chile

Teatinos 120
Santiago, 8340487
Chile

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