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The global financial cycle and capital flows: Taking stock
Author(s) -
Scheubel Beatrice,
Stracca Livio,
Tille Cédric
Publication year - 2025
Publication title -
journal of economic surveys
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.657
H-Index - 92
eISSN - 1467-6419
pISSN - 0950-0804
DOI - 10.1111/joes.12621
Subject(s) - economics , financial crisis , capital flows , stock (firearms) , monetary economics , capital (architecture) , macroeconomics , market economy , mechanical engineering , liberalization , engineering , history , archaeology
Abstract Since the global financial crisis, a rich and expanding literature on the so‐called global financial cycle (GFCy) has emerged. This has fueled a debate in academic and policy circles on how to measure the GFCy, and how it impacts international capital flows, possibly in a time‐varying way. We review the literature that has shown the relevance of the GFCy, as well as the heterogeneity of its impact on capital flows and its variations over time. We assess how various indicators of the GFCy affect episodes of large capital flows, and find a robust effect especially on episodes driven by non‐resident investors. Non‐linearity and instability over time, notably a less strong impact after the global financial crisis, are found at least for some GFCy indicators.