Financial flows, global interest rates, and political integration

Research output: Contribution to journalArticlepeer-review

1 Citation (Scopus)

Abstract

This paper empirically analyzes international financial flows using data from 2000 to 2016. Using a factor model to calculate a proxy for global interest rates, we confirm that national real interest rates include global elements, particularly those of advanced countries. Thus, interest rate differentials have no significant influence on the financial flows of advanced countries. On the other hand, we find that exchange rates and political integration more consistently influence investment decisions on forming financial portfolios than interest rates.

Original languageEnglish
Pages (from-to)313-320
Number of pages8
JournalFinance Research Letters
Volume31
DOIs
Publication statusPublished - 2019 Dec

Keywords

  • Financial flows
  • Global interest rate
  • Uncovered interest rate parity

ASJC Scopus subject areas

  • Finance

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