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The Role of Asymmetry and Uncertainties in the Capital Flows-Economic Growth Nexus

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  • Raheem, Ibrahim
  • le Roux, Sara
  • Asongu, Simplice

Abstract

This study examines the asymmetry between capital flows and economic growth in 42 countries for the period 1990-2017. It further argues that uncertainty is an important channel through which asymmetry operates. As such, the three measures of uncertainty are macroeconomic, fiscal and institutional. The Generalised Method of Moments is used as an empirical strategy. The existence of an asymmetry is confirmed by the findings as capital flows are more reactive to economic drag when compared to economic growth. Furthermore, the channels through which asymmetry operate are heterogeneous to measures of capital flows and proxies for uncertainty.

Suggested Citation

  • Raheem, Ibrahim & le Roux, Sara & Asongu, Simplice, 2019. "The Role of Asymmetry and Uncertainties in the Capital Flows-Economic Growth Nexus," MPRA Paper 101525, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:101525
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    More about this item

    Keywords

    Capital flows; Economic growth; Asymmetry; Uncertainty and Emerging countries;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • F30 - International Economics - - International Finance - - - General
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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