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Expectations, sentiments and capital flows to emerging market economies

Author

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  • Beckmann, Joscha
  • Boonman, Tjeerd M.
  • Schreiber, Sven

Abstract

This paper provides a novel look at capital flow determinants by assessing the role of expectations and media sentiments. Analyzing eight emerging market economies, we assess the effects of macroeconomic expectations and disagreement among professionals and various media-based sentiment indicators. Our results show that survey and sentiment indicators which are available in real time contain useful information about capital flow dynamics which go beyond the effects of conventional push and pull factors for all countries we analyze. News sentiment related to the exchange rate have the strongest effects on capital flows. Finally, we identify substantial heterogeneity across countries.

Suggested Citation

  • Beckmann, Joscha & Boonman, Tjeerd M. & Schreiber, Sven, 2024. "Expectations, sentiments and capital flows to emerging market economies," Emerging Markets Review, Elsevier, vol. 62(C).
    • Handle: RePEc:eee:ememar:v:62:y:2024:i:c:s1566014124000670
    DOI: 10.1016/j.ememar.2024.101172
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    More about this item

    Keywords

    Portfolio capital inflows; Analyst forecasts; News sentiments; Dispersion; Emerging market economies;
    All these keywords.

    JEL classification:

    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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