NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Capital Flows and Economic Growth in the Era of Financial Integration and Crisis, 1990-2010

Joshua Aizenman, Yothin Jinjarak, Donghyun Park

NBER Working Paper No. 17502
Issued in October 2011
NBER Program(s):   ITI

We investigate the relationship between economic growth and lagged international capital flows, disaggregated into FDI, portfolio investment, equity investment, and short-term debt. We follow about 100 countries during 1990-2010 when emerging markets became more integrated into the international financial system. We look at the relationship both before and after the global crisis. Our study reveals a complex and mixed picture. The relationship between growth and lagged capital flows depends on the type of flows, economic structure, and global growth patterns. We find a large and robust relationship between FDI - both inflows and outflows - and growth. The relationship between growth and equity flows is smaller and less stable. Finally, the relationship between growth and short-term debt is nil before the crisis, and negative during the crisis.

download in pdf format
   (674 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w17502

Published: Joshua Aizenman & Yothin Jinjarak & Donghyun Park, 2013. "Capital Flows and Economic Growth in the Era of Financial Integration and Crisis, 1990–2010," Open Economies Review, Springer, vol. 24(3), pages 371-396, July. citation courtesy of

Users who downloaded this paper also downloaded these:
Prasad w17497 Role Reversal in Global Finance
Aizenman and Sushko w17258 Capital flows: Catalyst or Hindrance to economic takeoffs?
Aizenman and Sushko w17228 Capital Flow Types, External Financing Needs, and Industrial Growth: 99 countries, 1991-2007
Chinn, Eichengreen, and Ito w17513 A Forensic Analysis of Global Imbalances
Prasad, Rajan, and Subramanian w13619 Foreign Capital and Economic Growth
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us