Policy Uncertainty, Irreversibility, and Cross-Border Flows of Capital (Paperback)

We examine the effects of government policy uncertainty on cross-border capital flows. FDI flows from US companies to foreign affiliates drop significantly during the period just before an election. The election effect for FDI is larger than election cycles in domestic investment. The electoral patterns in FDI flows are more pronounced in countries with higher propensities for policy reversals and when election outcomes are more uncertain. Our identification strategy compares variation in different types of capital flows into the same country around the timing of national elections. The electoral cycles are present in relatively irreversible FDI flows but not in foreign portfolio investment flows, suggesting a likely causal link from political uncertainty to and capital flows.

General

Imprint:	Createspace Independent Publishing Platform
Country of origin:	United States
Release date:	April 2014
First published:	April 2014
Authors:	Federal Reserve Board
Dimensions:	280 x 216 x 3mm (L x W x T)
Format:	Paperback - Trade
Pages:	50
ISBN-13:	978-1-4991-3690-6
Categories:	Books > Business & Economics > Economics > Macroeconomics > General Promotions
LSN:	1-4991-3690-0
Barcode:	9781499136906

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