Sailing through this Storm? Capital Flows in Asia during the Crisis
AbstractThe current crisis has led to an unprecedented collapse in international capital flows, with substantial heterogeneity across regions. Asian economies were relatively unaffected, despite having been the center of the storm in the crisis of the late 1990s. The contraction in capital flows for Asian countries was limited to the most acute phase of the crisis following the collapse of Lehman Brothers, after which capital flows rebounded. We find that the stronger performance of Asia primarily reflects its more limited reliance on international banking compared to Europe and the United States. We find little evidence that the drivers of capital flows had a differentiated impact in Asia. Finally, we show that while higher initial levels of foreign reserves did not insulate countries from a turnaround in private capital flows, a larger use of reserves at the height of the crisis limited the contraction in gross private outflows.
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Bibliographic InfoPaper provided by Hong Kong Institute for Monetary Research in its series Working Papers with number 202011.
Length: 50 pages
Date of creation: Jul 2011
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International Capital Flows; Banking Integration; Crisis;
Other versions of this item:
- Cédric Tille, 2012. "Sailing Through This Storm? Capital Flows In Asia During The Crisis," Pacific Economic Review, Wiley Blackwell, vol. 17(3), pages 467-488, 08.
- NEP-ALL-2011-08-09 (All new papers)
- NEP-BAN-2011-08-09 (Banking)
- NEP-IFN-2011-08-09 (International Finance)
- NEP-MON-2011-08-09 (Monetary Economics)
- NEP-OPM-2011-08-09 (Open Economy Macroeconomic)
- NEP-SEA-2011-08-09 (South East Asia)
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