Skip to main content

Research Repository

Advanced Search

Global economic policy Uncertainty, gross capital Inflows, and the mitigating role of Macroprudential policies

Andrikopoulos, Athanasios; Chen, Zhongfei; Chortareas, Georgios; Li, Kexin


Zhongfei Chen

Georgios Chortareas

Kexin Li


We consider the effects of global economic policy uncertainty on capital inflows and the potentially mitigating effect of different macroprudential frameworks and policies on this effect. While macroprudential policies aim to maintain domestic financial stability, they can also affect cross-border capital flows. We use a global panel of 84 economies during 1997–2018, to analyze the relationships among global economic policy uncertainty, macroprudential policies, and gross capital inflows. We find that global economic policy uncertainty impacts negatively on gross capital inflows. The tightening of macroprudential policies, however, can moderate this effect by nearly 30%-40%. Disaggregating macroprudential policy instruments indicates that supply-side tools, especially those related to bank capital requirements, are the most effective. Moreover, heterogeneity exists among different capital inflows; more specifically, portfolio investment is influenced most significantly, while direct and other types of investment remain unchanged. Our results have direct implications for the utilization of macroprudential policies in managing capital inflows.


Andrikopoulos, A., Chen, Z., Chortareas, G., & Li, K. (2023). Global economic policy Uncertainty, gross capital Inflows, and the mitigating role of Macroprudential policies. Journal of International Money and Finance, 131, Article 102793.

Journal Article Type Article
Acceptance Date Dec 21, 2022
Online Publication Date Dec 31, 2022
Publication Date Mar 1, 2023
Deposit Date Jan 30, 2023
Publicly Available Date Jul 1, 2024
Journal Journal of International Money and Finance
Print ISSN 0261-5606
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 131
Article Number 102793
Keywords Global economic policy uncertainty; Gross capital inflows; Macroprudential policies
Public URL