Uncertainty and episodes of extreme capital flows in the Euro Area

Abstract

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Brexit, What Brexit? Euro Area Portfolio Exposures to the United Kingdom Since the Brexit Referendum

“…Studies of the determinants of portfolio flows have arrived at the conclusion that country-specific uncertainty is associated with a retrenchment from the relevant market -see Fratzscher (2012); Caporale et al (2015); Sarno et al (2016); Schmidt and Zwick (2015) -see also Choi and Furceri (2019), in the case of bilateral banking flows, and Julio and Yook (2016) for foreign direct investment. Notwithstanding, these studies generally use push and pull frameworks, controlling for both, respectively, global and countryspecific determinants of bilateral flows.…”

Economic Uncertainty and Exchange Market Pressure: Evidence From China

“…Albeit, indeed, the unconventional monetary policy undertaken by the U.S. Federal Reserve during the financial crisis reduced the dollar's value (Neely, 2015), China had pegged the renminbi to the dollar again during this period. Further, China had experienced large capital outflows during the crisis (Broner et al, 2013) due to the need to relieve the value-at-risk of U.S. domestic assets caused by the crisis (Schmidt & Zwick, 2015). Thus, the impact of U.S. EPU on China's EMP could retain its past pattern without being altered by the crisis.…”

Foreign direct investment under uncertainty evidence from a large panel of countries

“…However, FDI flows seem to respond much less to global push factors than portfolio flows and banking flows (Belke & Volz, 2018;Koepke, 2015). Schmidt and Zwicka (2015) confirm that country-specific uncertainty seems to be more relevant for direct investors than for portfolio investors during extreme contraction of capital flows in the Euro Area.…”