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Board of Governors of the Federal Reserve System (U.S.)
International Finance Discussion Papers
International Dollar Flows
Using confidential Federal Reserve data, we study the factors driving U.S. banknote flows between the United States and other countries. These flows are a significant component of capital flows in emerging market economies, where physical U.S. currency functions as a safe asset and precautionary demand for U.S. banknotes is a form of flight to quality. Prior to the global financial crisis, country-specific factors, including local economic uncertainty, largely explain the volume and heterogeneity of the flows. Since the crisis, global factors, particularly, global economic uncertainty, explain the flows markedly well. Further, precautionary demand for U.S. banknotes is not episodic.
Cite this item
Ayelen Banegas & Ruth Judson & Charles Sims & Viktors Stebunovs, International Dollar Flows, Board of Governors of the Federal Reserve System (U.S.), International Finance Discussion Papers 1144, 09 Sep 2015.
- E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
- E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
- F30 - International Economics - - International Finance - - - General
Keywords: capital flows; currency flows; U.S. banknotes; safe asset; emerging market economies; economic uncertainty; flight to quality; capital flight; money demand.
This item with handle RePEc:fip:fedgif:1144
is also listed on EconPapers
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