Photo by austindistel from unsplash
Abstract Previous studies have found that foreign capital flows into the US Treasury and corporate-bond markets drive US long-term interest rates. In this paper, we extend the literature by showing… Click to show full abstract
Abstract Previous studies have found that foreign capital flows into the US Treasury and corporate-bond markets drive US long-term interest rates. In this paper, we extend the literature by showing that (1) foreign capital flows also drive the US risk structure of interest rates (i.e., credit spreads), and (2) the impacts of foreign capital flows through the credit spread on corporate financing and investment as well as aggregate economic activities are significant, even outside of the Global Financial Crisis period.
Keywords:
capital flows;
foreign capital;
flows credit;
credit spreads
Journal Title: Journal of International Financial Markets, Institutions and Money
Year Published: 2018
Link to full text (if available)
Share on Social Media: Sign Up to like & get
recommendations!
Journal Title: Journal of International Financial Markets, Institutions and Money
Year Published: 2018
Link to full text (if available)
Share on Social Media: Sign Up to like & get
recommendations!