Reach for Yield and Fickle Capital Flows
Download or Read eBook Reach for Yield and Fickle Capital Flows PDF written by Ricardo J. Caballero and published by . This book was released on 2018 with total page 12 pages. Available in PDF, EPUB and Kindle.
Author | : Ricardo J. Caballero |
Publisher | : |
Total Pages | : 12 |
Release | : 2018 |
ISBN-10 | : OCLC:1028238169 |
ISBN-13 | : |
Rating | : 4/5 (69 Downloads) |
Book Synopsis Reach for Yield and Fickle Capital Flows by : Ricardo J. Caballero
Book excerpt: In Caballero and Simsek (2018), we develop a model of fickle capital flows and show that, when countries are similar, international flows create global liquidity and mitigate crises despite their fickleness. In this paper, we focus on the asymmetric situation of Emerging Markets (EM) exchanging flows with Developed Markets (DM) that feature lower returns but less frequent crises. Relatively high DM returns help to mitigate EM crises, by reducing fickle inflows, and by providing greater liquidity. The situation dramatically changes as the DM returns fall, as this increases the fickle inflows driven by reach for yield and exacerbates EM crises.