Capital inflows and asset prices: The recent evidence of selected east Asian economies

This discussion paper aims to provide empirical evidence on the relationship between capital inflows and asset prices, focusing on China, Hong Kong, Indonesia, Korea and Thailand. The positive responses of share prices to portfolio inflows shocks were verified in all the estimated economies. The author argues that this sheds light on the function of the direct channel into the stock market; the indirect channel through domestic money supply appeared to work in the economies with peg regimes, such as Hong Kong, whereas it did not work in those with floating regimes, such as Indonesia, Korea and Thailand. The author argues this is due to the sterilization of intervention in foreign exchange markets.

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Additional Info

Field Value
Document type Reports, journal articles, and research papers (including theses and dissertations)
Language of document
  • English
Topics
  • Banking and financial services policy and regulation
  • Economy and commerce
  • Foreign investors
  • Stock market
  • Trade policy and regulation
Geographic area (spatial range)
  • Thailand
Copyright Unclear copyright
Version / Edition 1.0
License unspecified
Contact

Research Department Policy Research Institute, MOF 3-1-1 Kasumigaseki, Chiyoda-ku, Tokyo 100-8940, Japan. Tel 03-3581-4111.

Author (individual) Taguchi, Hiroyuki
Publication date 2011
Date Uploaded June 18, 2015, 13:57 (UTC)
Date Modified January 7, 2016, 23:28 (UTC)