Study On The Impact Of Capital Account Opening On Short-term Capital Flow

Under the background of the trend of global economic integration and the continuous liberalization of financial development,capital account liberalization can bring foreign liquidity to capital importers,promote the development of economy,but also intensified its domestic asset prices and exchange rate fluctuations,especially in the financial crisis will introduce international risk,affect domestic interest rates,currency exchange rate,etc.At the same time,the flow of international capital to emerging market countries is more and more frequent,constantly showing new changes and trends.Among them,because of its high risk,high speculation and high liquidity,short-term capital flow is more likely to have an impact on a country’s exchange rate,interest rate,securities prices,etc.Therefore,it is a hot topic for scholars to study capital account opening and short-term capital flow.Based on the research and the quarterly data,this paper in order to putting forward some policy suggestions on capital account liberalization,by conducting an empirical analysis,using the condition of 10 developed economies and 14 emerging market countries.Concentrating on the capital account liberalization and short-term capital flows especially.This paper selects 10 typical developed economies and 14 emerging market countries as sample countries,and the data are from the first quarter of 2010 to the second quarter of 2020,a total of 46 issues.Secondly,this paper also selected the international financial market volatility,the interest-rate spread at home and abroad,exchange rate changes rate,growth rate,the rate of inflation,and the factors affecting the stock price growth this jointly explore capital account openness influence on short-term capital flow,and know for emerging markets and developed economies,what are the differences and similarities.In this paper,by constructing panel vector autoregressive(PVAR)empirical model analysis of two kinds of samples to open capital account in the country’s short-term capital flows,using granger causality test,impulse response analysis and variance decomposition methods,based on quarterly data for empirical research,analysis of short-term capital flows to open capital account have more far-reaching influence,and will be combined with other factors,such as the rate of exchange rate changes,the international financial market volatility factors such as the indirect effects on short-term capital flow,and for the impact of emerging market countries than in developed economies,and time is also longer.To sum up,this paper gives some policy suggestions on capital account opening for emerging market countries,that is,the speed of capital account opening should not be too fast,and the influence of exchange rate,interest rate changes,international financial market fluctuations and other factors should be taken into account to steadily promote capital account opening.