Date of Award
Bachelor of Arts
Following the global financial crisis in 2008, the Federal Reserve implemented unconventional monetary policy through near-zero interest rates and quantitative easing. This unprecedented policy has had unintended consequences, including effects on capital flows to emerging market economies. This paper studies the effect of U.S. monetary policy on portfolio investment in the BRICS countries. Using exogenous and endogenous variables as determinants of capital flows, I use a series of panel regression models that includes U.S. monetary policy as an explanatory variable of portfolio investment in the BRICS countries. My results suggest that U.S. monetary policy is not a significant determinant of capital flows in the BRICS countries, however they do suggest that interest rate spreads on BRICS sovereign bonds and U.S. treasuries are significant determinants.
Philbrick, Lillian, "United States Monetary Policy as a Determinant of Capital Flows to Emerging Market Economies: A Study on Portfolio Investment to the BRICS Countries" (2017). Economics Student Theses and Capstone Projects. 30.