The Volatility Of International Capital Flows: Measure, Effect And Supervision

The volatility of international capital flows has attracted attention with the crises in 1990s. Accordingly, the fluctuation periods in less developed markets have offered invaluable evidence for economists. In general, Chinese scholars have just started the research on the field concerned and the analysis on its determining factors, characters and effects is so insufficient.Concerning the present research outcome about the volatility of international capital flows, consequently, the thesis has both theoretical and realistic significance. First and foremost, it provides us with profound understanding about its reasons, measure, and influence on macro economy. In addition, it comprehensively shows us the volatility of each part of (non-FDI) capital flows. Finally, the suggestion to manage fluctuating capital flows is given, enlightening the reforms of management of capital flows.Furthermore, the thesis has achieved certain innovation as follows. (1) the change of the volatility of capital flows. (2) the introduction of non-FDI capital flows and its difference from FDI in empirical analysis. (3) the relevance analysis between the volatility of non-FDI capital flows and related macro economic variables, the buildup of VAR or VECM and structure analysis by cointegration, the use of impulse response and Variance Decomposition technology. (4) the introduction of positive feedback factor.In a word, the thesis concludes that: (1) Generally speaking, the volatility of non-FDI capital flows in developed countries is rather higher than that in LDCs. (2) The volatility of capital flows has negatively affected Chinese economic development. (3) non-FDI capital flows have interactively impacted Chinese GDP development. On the contrary, based on the low capital variability coefficient, other investment of non-FDI capital flows has significant influence on consumption. (4) The short-term capital flows have considerable impact on economic growth and inflation, but smaller on the average exchange rate of RMB. (5) In China, the management of fluctuating capital flows should be gradually transformed to indirect market-based management.