The Analysis Of Impact Of Short-time Capital Movements In Our Country Recently Caused By The FED Raising Interest Rates

With the continuous development of economic globalization and continuous innovation of financial instruments,the cooperation of economy and trade among various countries is more diversified and complicated.International economic exchanges have promoted the international flow of capital.The trend of international capital flow from developed countries to emerging market countries is obvious,it is an opportunity for China which is one member of developing countries,the longer period steady development of China's economy and the huge capital needs of China's capital market have attracted great attraction from international capital,the international short-term capital inflows have had a positive impact on the development of China's economy and capital markets.However,the drawbacks of international short-term capital flows in the development process are increasingly apparent.Short-term capital flows are strongly speculative,a large number of speculative capital in order to earn interest through the difference of interest rates and exchange rate,have accelerated the pace of capital flows and shortened capital flows cycle.In particular,since the United States announced its withdrawal from QE policy at the end of 2014,people have anticipated the next rate hike by the Federal Reserve,the rapid withdrawal of short-term capital from international has brought tremendous risks to our economy.The article analyzed the impact of the Fed's new round of rate hikes on China's short-term capital flows.First of all,according to the balance of payments statement,I used the non-direct investment net method to calculate the scale of our country's short-term capital flows in recent years and analyzed the characteristics of our country's short-term capital flows;Second,based on the sub-adjustment method in short-term capital flow and the experience of predecessors,I used qualitative and quantitative methods to analyze the short-term capital flows in China;Third,this article takes 2015 as a time node to compare the changes in the short-term capital flows before and after the rate hike between 2007-2015 and 2015-2017.Taking into account the availability of data,this paper uses quarterly data,all variables are organized into the form of Chinese-American differences,and the Chinese-American data are closely combined to improve the accuracy of the results.Before the Fed raised interest rates in a new round,it was found that the factors affecting short-term capital flows were mainly economic growth rates,exchange rates,trade balances and stock returns through the establishment of a VAR model.After the Fed raised the interest rate in the new round,due to less quarterly data,the paper adopted the OLS small sample regression method and found that the impact on international short-term capital flow by the difference rate of economic growth,interest rate differential,exchange rate,stock yield and inflation rate is even stronger after the interest rate increase.Through the impulse response function,it is analyzed that a new round of interest rate hikes has led to changes in China's short-term capital flows,which in turn have affected our country's imports,exports,stock markets,real estate,and prices.Finally,in conjunction with the influencing factors of spillover effects of short-term capital flows,relevant policy recommendations are proposed.Under the background of the Fed's rate hike,the analysis of the short-term capital flow effect plays an important role in preventing and responding to the potential financial risks brought by international short-term capital flows.Thereafter,based on the influence factors of raising interest rate,I made an impulse response function to the scale of short-term capital flows and analyzed the effect of a new round of rate hikes by the Federal Reserve on our country's short-term capital flows;Finally,I put forward relevant policy recommendations based on the above study.Under the background of the Fed's rate hike,studying the impact on short-term capital flows will play an important role in preventing and responding to the potential financial risks brought by international short-term capital flows.