The following essay will shortly define the key-terms Emerging-Market and Capital-Flows and subsequently show the historic development of Capital-Inflows to the defined countries. After the examination of the determinants of the International Capital Flows, the fourth part will deal with a topicality, the pending tampering of the US Federal Reserve’s Quantitative Easing and elaborate the consequences for the global capital-market situation.
Inhaltsverzeichnis (Table of Contents)
- Introduction – Definition of key terms
- Determinants of Capital Flows
- Current situation and outlook
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
The main objective of this essay is to examine the determinants of capital flows to emerging markets and their current situation, considering the potential effects of the US Federal Reserve's Quantitative Easing (QE) taper.
- Definition of Emerging Markets (EMs)
- Historical development of capital flows to EMs
- Key determinants of capital flows to EMs
- The potential impact of QE tapering on capital flows to EMs
- Possible economic consequences for EMs
Zusammenfassung der Kapitel (Chapter Summaries)
- Introduction – Definition of key terms: This chapter defines the key terms "Emerging Markets" and "Capital Flows," highlighting the historical development of the concept of EMs and identifying the countries included in the IMF's definition of EMs. Key indicators like population, GDP, and debt levels are also compared to the world average.
- Determinants of Capital Flows: This chapter discusses the factors influencing capital flows to EMs, focusing on both domestic pull factors and global push factors. It examines the "Capital Flow Bonanzas" phenomenon and its potential for both positive and negative consequences for EMs.
- Current situation and outlook: This chapter addresses the current situation of capital flows to EMs in light of the potential tapering of the US Federal Reserve's Quantitative Easing program. It explores the potential impact of this tapering on EMs and the resulting economic implications for these countries, considering both positive and negative scenarios.
Schlüsselwörter (Keywords)
This essay focuses on the following keywords and focus topics: Emerging Markets, Capital Flows, Quantitative Easing (QE), Tapering, International Finance, Economic Growth, Foreign Direct Investment (FDI), Portfolio Investment, Macroeconomic Policies, Risk Aversion, Economic Uncertainty, Sudden Stops, Currency Depreciation, and Financial Crises.
Frequently Asked Questions
What is an "Emerging Market"?
An Emerging Market is a country that has some characteristics of a developed market but does not yet fully meet its standards, often showing rapid economic growth.
What are "Capital Flows"?
Capital flows refer to the movement of money for investment, trade, or business production in and out of a country's economy.
What is "Quantitative Easing" (QE)?
QE is a monetary policy where a central bank (like the US Fed) buys government securities to increase the money supply and encourage lending and investment.
What happens during "QE Tapering"?
Tapering is the gradual reduction of the central bank's bond-buying program, which often leads to higher interest rates and can cause capital to flow out of emerging markets.
What are "Push" and "Pull" factors for capital?
Push factors are global conditions (like low US interest rates) that drive investors away from developed markets, while Pull factors are domestic conditions (like high growth) that attract investors to emerging markets.
- Quote paper
- Dominik Hueller (Author), 2014, Current Situation of Capital-Flows to Emerging-Markets, Munich, GRIN Verlag, https://www.grin.com/document/284945
