JOURNAL OF INTERNATIONAL FINANCIAL MARKETS INSTITUTIONS & MONEY, vol.75, 2021 (Peer-Reviewed Journal)
Article / Article
JOURNAL OF INTERNATIONAL FINANCIAL MARKETS INSTITUTIONS & MONEY
Social Sciences Citation Index, Scopus, International Bibliography of Social Sciences, ABI/INFORM, Business Source Elite, Business Source Premier, EconLit
Global financial crisis, Stock bubbles, Capital flows, Emerging markets, LIQUIDITY SHOCKS EVIDENCE, CAPITAL FLOWS, FINANCIAL CRISIS, GLOBAL BANKS, FLIGHT HOME, TRANSMISSION, BUBBLES, CREDIT, GLOBALIZATION, LINKAGES
We investigate bubble-like dynamics in 22 Emerging Market Economies (EMEs). We identify the existence of synchronized stock markets' exuberance across EMEs before the 2000s Global Financial Crisis (GFC). We also investigate whether international short-term capital flows help to predict such episodes of exuberance. We find that all three types of short-term flows are significant, but international equity flows prove the most robust predictor. International capital flows (especially equity flows) partially explain the synchronization of exuberance detected and thus demand close attention when monitoring bubble-like dynamics.