International capital flows: implications for economic activity and monetary policy

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dc.contributorGivens, Gregory
dc.contributorKeskin, Burcu
dc.contributorLee, Junsoo
dc.contributorLiu, Xiaochun
dc.contributor.advisorReed, Robert
dc.contributor.authorHarrison, Andre
dc.contributor.otherUniversity of Alabama Tuscaloosa
dc.date.accessioned2020-09-30T17:24:47Z
dc.date.available2020-09-30T17:24:47Z
dc.date.issued2020
dc.descriptionElectronic Thesis or Dissertationen_US
dc.description.abstractIn the early 2000’s, there were large swings in capital flows across countries due to a worldwide savings glut. How did it affect investment across countries? Did it have an impact on the transmission channels of monetary policy? Chapter 1 develops a micro founded model of money and banking based on liquidity risk in which the government of a developing country mobilizes the savings of its citizens to lend to advanced countries. In this regard, the effects of monetary policy across countries can be meaningfully studied. Notably, the implications for investment in the developing country depend on its government’s commitment to lending to the advanced world. Furthermore, the increase in foreign capital to the advanced economy is complementary to domestic investment in the advanced economy. The effects of monetary policy also depend on the level of commitment by the government in the poor country. Despite recent improvements in the developing world, many developing countries still receive capital inflows from advanced countries. Chapter 2 shows that this is important as banks in advanced countries channel funds from domestic savers to entrepreneurs. Consequently, there are crowding out effects when the advanced country funds foreign debt. In turn, the effectiveness of monetary policy is exacerbated to reflect these crowding out effects. Further, there are adverse effects of monetary policy in the advanced country on capital formation in the developing country as external debt increases. Chapter 3 employs a sign-identified structural vector autoregressive (SVAR) model to analyze the effects of various types of official capital inflows to the United States on economic activity and the Federal Reserve. In particular, a positive shock to foreign official holdings of Treasuries reduces the size of the Federal Reserve's balance sheet and has a negative impact on business loans. Consequently, there is no significant impact on real estate loans and economic activity. Finally, a positive shock to foreign official holdings of corporate debt lowers the Fed funds rate, treasury yields regardless of maturity and has a significant impact on bank lending and economic activity due to a lack of response from the Federal Reserve.en_US
dc.format.extent243 p.
dc.format.mediumelectronic
dc.format.mimetypeapplication/pdf
dc.identifier.otheru0015_0000001_0003606
dc.identifier.otherHarrison_alatus_0004D_14102
dc.identifier.urihttp://ir.ua.edu/handle/123456789/7005
dc.languageEnglish
dc.language.isoen_US
dc.publisherUniversity of Alabama Libraries
dc.relation.hasversionborn digital
dc.relation.ispartofThe University of Alabama Electronic Theses and Dissertations
dc.relation.ispartofThe University of Alabama Libraries Digital Collections
dc.rightsAll rights reserved by the author unless otherwise indicated.en_US
dc.subjectEconomics
dc.titleInternational capital flows: implications for economic activity and monetary policyen_US
dc.typethesis
dc.typetext
etdms.degree.departmentUniversity of Alabama. Department of Economics, Finance, and Legal Studies
etdms.degree.disciplineEconomics (Business)
etdms.degree.grantorThe University of Alabama
etdms.degree.leveldoctoral
etdms.degree.namePh.D.

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