Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/224149
Authors: 
Cheung, Yin-Wong
Steinkamp, Sven
Westermann, Frank
Year of Publication: 
2019
Series/Report no.: 
Working Paper No. 115
Publisher: 
Osnabrück University, Institute of Empirical Economic Research, Osnabrück
Abstract: 
We use two measures to study two capital flight channels for Germany. One measure is based on the concept of trade misinvoicing and one on net claims and liabilities in the Eurosystem of central banks. For both measures, we propose refinements to enhance the assessment of capital flight. We find that capital flight towards Germany via these two channels has been quite sizable in the recent decade and can tally to about 2% of GDP annually. Regarding their determinants, we show that the two capital flight measures are driven by both common and measure-specific factors. Traditional determinants such as covered interest differentials only play a limited role, while crisis-specific factors such as economic policy uncertainty, the ECB collateral policy, as well as currency misalignment are driving factors of the investors' apparent flight-to-safety behavior.
Subjects: 
Illicit Capital Flight
Trade Misinvoicing
TARGET2 Balance
Flight-to-safety
Economic Policy Uncertainty
JEL: 
F3
F32
G15
Document Type: 
Working Paper

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