Publication date

दिस्, 2024

Details

Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 48(4), pages 999-1019, December.

Authors

Vrinda Gupta, Amlendu Dubey

Abstract

The literature extensively examines the impact of US monetary policy on global financial cycle; however, it does not show whether specific cross-country financial cycles exist or whether the US monetary policy has any differentiated impact on them. In this paper we investigate the existence of cross-country financial cycles across a group of advanced and emerging market economies for portfolio, FDI and credit inflows and outflows. We find that cross-country financial cycles exist and the impact of US monetary changes on them varies as compared to the impact on global financial cycle. We find that the impact on global financial cycle is more pronounced and lasts longer as compared to impact on cross-country financial cycles. Rather than the US monetary policy which determines global financial cycle, macro-financial linkages between countries determine their cross-country cycles.