Front Matter Page
Strategy, Policy and Review Department and Institute for Capacity Development
Contents
Abstract
I. Introduction
II. Existing Literature
A. Theoretical Underpinnings between Capital Flows and the Economic Cycle
B. Existing Empirical Work on the Cyclicality of Capital Flows
III. Stylized Facts
A. A New Database on Gross Capital Flows to LIDCs
B. A First Look at the Cyclicality of Private Capital Inflows in LIDCs
IV. Estimation
A. Estimable Equation
B. Control Variables
V. Baseline Results
VI. Robustness Checks
A. GMM Regressions
B. Countries with Surges in Capital Inflows
C. Risk-on, Risk-off Regimes
D. Capital Inflows, Cyclical Fluctuations, and Trend Shocks
E. Alternative Control Variables
F. Alternative Measures of the Dependent Variable
VII. Conclusions
References
Figures
1. Comparison Between Ems and LIDCs by Percentile (% GDP)
2. Surges of Private Non-FDI Capital Flows (% of Total)
3. Capital Flows and the Cyclical Component of Output (1990–2012)
4. Amplitude of Private Inflows/GDP for Periods of Growth Above and Below the Median
Tables
1. Fixed Effects Regerssions for Private Non-FDI Capital Flows
2. GMM Regressions
3. Regressions for Countries that Experience Surges
4. Regressions with Time-Variant Unobservable Factors (CCEMG Estimator)
5. Regressions Including Trend Growth
6. Regressions with the Financial Reform Index
7. Alternative Measures of Capital Flows
Appendices
A. Description of Selected Variables
B. Descriptive Statistics for Selected Variables
C. Descriptive Statistics for Non-Small Non-Fragile LIDCs
D. List of LIDC Countries and Classification