Capital flows at risk: Taming the ebbs and flows

We propose a new quantile regression framework to predict the entire future probability distribution of capital flows emerging markets, based on changes in global financial conditions, domestic structural characteristics, and policies. The approach allows us differentiate between impact median versus tails predicted density flows, short- medium-term effects. find that FX- macroprudential interventions are effective mitigating downside risks portfolio stemming from adverse shocks, while tightening controls response appears be counterproductive. Good institutional frameworks not able shield countries increased volatility immediate aftermath but can contribute more rapid bounce-back foreign over medium term. Our results highlight limitations standard approach, which focuses only short-term behavior average flows.