IDEAS home Printed from https://ideas.repec.org/a/eee/quaeco/v60y2016icp115-124.html
   My bibliography  Save this article

Do short-term international capital inflows drive China's asset markets?

Author

Listed:
  • Wang, Chieh-Hsuan
  • Hwang, Jen-Te
  • Chung, Chien-Ping

Abstract

The purpose of this paper is to investigate the relationship between short-term international capital inflows and asset markets in China. First, several indices are used to measure the status of China's markets in recent years and to determine possible impacts of short-term foreign capital inflows on asset markets. Second, a structural vector auto-regressive (SVAR) model is used to explore the effects of the unsterilized portion of the monetary base and short-term international capital inflows on the Chinese stock markets and real estate markets. The empirical evidence demonstrates that the relationship between short-term international capital inflows and asset prices is self-fufilling and mutually reinforcing. The unsterilized portion of the monetary base further exacerbates asset price bubbles, which suggests that short-term international capital inflows and excess liquidity will gradually escalate the severity of asset price bubbles.

Suggested Citation

  • Wang, Chieh-Hsuan & Hwang, Jen-Te & Chung, Chien-Ping, 2016. "Do short-term international capital inflows drive China's asset markets?," The Quarterly Review of Economics and Finance, Elsevier, vol. 60(C), pages 115-124.
    • Handle: RePEc:eee:quaeco:v:60:y:2016:i:c:p:115-124
    DOI: 10.1016/j.qref.2015.10.006
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1062976915001052
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.qref.2015.10.006?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ahmed, Walid M.A., 2017. "The impact of foreign equity flows on market volatility during politically tranquil and turbulent times: The Egyptian experience," Research in International Business and Finance, Elsevier, vol. 40(C), pages 61-77.

    More about this item

    Keywords

    Structural vector auto-regressive model; Short-term international capital inflows; Asset prices; Excess liquidity;
    All these keywords.

    JEL classification:

    • C40 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - General
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:quaeco:v:60:y:2016:i:c:p:115-124. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620167 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.