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International Capital Flows When Safe Assets Scarcity Matters

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  • Ly Dai Hung
  • Nguyen Thi Thuy Hoan

Abstract

In an open multi-country economy, the safe assets supply shapes the pattern of international capital flows. A higher productivity growth rate raises the net capital inflows for economies with abundant safe assets, but reduces the net capital inflows for economies with scarce safe assets. The cross-section analysis on a sample of 170 economies over 1980–2013 confirms the theory. The evidence is robust for instrument-variable (IV) analysis method. JEL Classifications: F15, F36, F43

Suggested Citation

  • Ly Dai Hung & Nguyen Thi Thuy Hoan, 2022. "International Capital Flows When Safe Assets Scarcity Matters," South Asian Journal of Macroeconomics and Public Finance, , vol. 11(2), pages 151-167, December.
    • Handle: RePEc:sae:smppub:v:11:y:2022:i:2:p:151-167
    DOI: 10.1177/2277978721989934
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    More about this item

    Keywords

    International capital flows; safe assets; public debts; instrument-variable regression;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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