Capital Inflow Dynamics during the Implementation of Macroprudential Policies

• 발행기관: 한국무역학회
• 저자명: Jae-Hyun Suh
• 간행물 정보: 『Journal of Korea Trade (JKT)』Vol.29 No.2, 157~182쪽, 전체 26쪽
• 주제분류: 경제경영 > 무역학
• 파일형태: PDF
• 발행일자: 2025.04.30

국문 초록

Purpose - South Korea has experienced a few financial crises after gradually liberalizing its financial markets. Thus, the Korean government has implemented several macroprudential policies (MPs) to mitigate systemic risks in financial markets. Accordingly, this study examines whether MPs can restrict capital inflows, the channel through which external shocks are transmitted to the domestic economy. Design/Methodology - We used an annual panel data set of 53 advanced economies (AEs) and emerging market economies (EMEs) that have implemented diverse MPs. Furthermore, we estimated the dynamic behaviors of capital inflows before and after policy implementations to illustrate how foreign investors respond to information on the new implementation of those policies. Findings - First, capital inflows, particularly portfolio investment and other investment inflows, significantly reduced when tightening MPs were implemented. Second, such a reduction was greater in AEs than in EMEs. Third, the reduction was also greater when multiple tightening policy instruments were simultaneously combined. This finding indicates that South Korea can restrict volatile capital inflows by implementing MPs to prevent economic vulnerability to external shocks. Originality/value - To the best of our knowledge, relatively few studies have examined the relationships between MPs and capital inflows. We estimated the associations between 17 types of MPs and four categories of capital inflows across AEs and EMEs, providing diverse perspectives.

목차

1. Introduction

2. Literature Review

3. Stylized Facts on Macroprudential Policy

4. Data and Estimation Strategies

5. Results and Implications for the Korean Economy

6. Conclusion

References

키워드

Capital Inflows Capital Restriction Korean Economy Macroprudential Policy