Measuring the impact of financial flows on macroeconomic variables: the case of Brazil after the 2008 crisis
AbstractThe effects of changes in foreign portfolio investment flows on Brazilian GDP and investment during the financial crisis of 2008 are evaluated through impulse-response functions, parsimonious models, and out of sample forecasts. Impulse-response functions results show a positive relation between fixed income flows and GDP and investment, but this relation is not as strong between the real variables and equity flows, although these flows anticipate GDP and investment behavior. Expectations seem to have an important role in explaining GDP and investment, which also have an influence on flows. The reduced vulnerability of the Brazilian economy consequently lessened the effect of the crisis when compared with previous crisis episodes.
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Bibliographic InfoPaper provided by Universidade Federal do Paraná, Department of Economics in its series Working Papers with number 0117.
Length: 17 pages
Date of creation: 2011
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Note: Creation Date corresponds to the year in which the paper was published on the Department of Economics website. The paper may have been written a small number of months before its publication date.
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foreign portfolio investment; growth; investment; crisis; Brazil;
Find related papers by JEL classification:
- F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- E22 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-10-01 (All new papers)
- NEP-FDG-2011-10-01 (Financial Development & Growth)
- NEP-LAM-2011-10-01 (Central & South America)
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