Fuertes, Ana-Maria and Phylaktis, Kate and Yan, Cheng (2016) Hot money in bank credit flows to emerging markets during the banking globalization era. Journal of International Money and Finance, 60. pp. 29-52. DOI https://doi.org/10.1016/j.jimonfin.2014.10.002
Fuertes, Ana-Maria and Phylaktis, Kate and Yan, Cheng (2016) Hot money in bank credit flows to emerging markets during the banking globalization era. Journal of International Money and Finance, 60. pp. 29-52. DOI https://doi.org/10.1016/j.jimonfin.2014.10.002
Fuertes, Ana-Maria and Phylaktis, Kate and Yan, Cheng (2016) Hot money in bank credit flows to emerging markets during the banking globalization era. Journal of International Money and Finance, 60. pp. 29-52. DOI https://doi.org/10.1016/j.jimonfin.2014.10.002
Abstract
This paper investigates the relative importance of hot money in bank credit and portfolio flows from the US to 18 emerging markets over the period 1988-2012. We deploy state-space models à la Kalman filter to identify the unobserved hot money as the temporary component of each type of flow. The analysis reveals that the importance of hot money relative to the permanent component in bank credit flows has significantly increased during the 2000s relative to the 1990s. This finding is robust to controlling for the influence of push and pull factors in the two unobserved components. The evidence supports indirectly the view that global banks have played an important role in the transmission of the global financial crisis to emerging markets, and endorses the use of regulations to manage international capital flows.
Item Type: | Article |
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Uncontrolled Keywords: | International capital flows; Hot money; Crisis transmission; Banking globalisation; Kalman filter |
Divisions: | Faculty of Social Sciences > Essex Business School |
SWORD Depositor: | Unnamed user with email elements@essex.ac.uk |
Depositing User: | Unnamed user with email elements@essex.ac.uk |
Date Deposited: | 02 Jul 2025 14:18 |
Last Modified: | 02 Jul 2025 14:18 |
URI: | http://repository.essex.ac.uk/id/eprint/34780 |
Available files
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Licence: Creative Commons: Attribution-Noncommercial-No Derivative Works 4.0