scholarly journals International Capital Flow Pressures

2018 ◽  
Author(s):  
Linda Goldberg ◽  
Signe Krogstrup
Keyword(s):  
Capital Flow ◽  
International Capital ◽  
International Capital Flow

RE-MEASUREMENT OF SHORT-TERM INTERNATIONAL CAPITAL FLOWS AND ITS APPLICATION: EVIDENCE FROM CHINA

2018 ◽  
pp. 1-21
Author(s):  
JUNYI SHI
Keyword(s):  
Capital Flows ◽  
Direct Method ◽  
Capital Flow ◽  
International Capital Flows ◽  
International Capital ◽  
Short Term ◽  
Residual Method ◽  
Leading Indicator ◽  
Cross Correlation Analysis ◽  
International Capital Flow

In this paper, we use the improved direct method and improved residual method to re-measure the annual scale and to measure the quarterly scale of the short-term international capital flows based on the Chinese Balance of Payment table. At the same time, we use the residual method to estimate the monthly scale of the Chinese short-term international capital flows as well. Then we explain and test these calculated results. Next we apply the results to the lead–lag analysis of macro-economy. To judge whether the short-term international capital flow is a leading indicator, we apply the Kullback–Leibler information method and cross-correlation analysis method to analyze the lead–lag relationship between the short-term international capital flows and macro-economy by selecting some representative macroeconomic indicators as a reference. Our empirical analysis shows that in China, the short-term international capital flow is a leading indicator to macro-economy and a coincident indicator to Purchasing Managers’ Index. In the end, we give some conclusions and policy proposals.

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