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Capital flight and the uncertainty of government policies

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  • Hermes, Niels
  • Lensink, Robert

Abstract

This paper shows that policy uncertainty, measured by the uncertainty of budget deficits, tax payments, government consumption and the inflation rate, has a statistically significant positive impact on capital flight. This result remains robust after having applied stability tests.
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Suggested Citation

  • Hermes, Niels & Lensink, Robert, 2001. "Capital flight and the uncertainty of government policies," Economics Letters, Elsevier, vol. 71(3), pages 377-381, June.
    • Handle: RePEc:eee:ecolet:v:71:y:2001:i:3:p:377-381
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    References listed on IDEAS

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    1. Lensink, Robert & Hermes, Niels & Murinde, Victor, 2000. "Capital flight and political risk," Journal of International Money and Finance, Elsevier, vol. 19(1), pages 73-92, February.
    2. Aizenman, Joshua & Marion, Nancy P. & Marion, Nancy P., 1993. "Macroeconomic uncertainty and private investment," Economics Letters, Elsevier, vol. 41(2), pages 207-210.
    3. Sala-i-Martin, Xavier, 1997. "I Just Ran Two Million Regressions," American Economic Review, American Economic Association, vol. 87(2), pages 178-183, May.
    4. Claessens, Stijn & Naude, David, 1993. "Recent estimates of capital flight," Policy Research Working Paper Series 1186, The World Bank.
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