Push factors have an important role in increasing the probability of surges in net inflows. Higher growth in main trading partners encourages a more likely occurrence of a surge in net inflows. A greater real world interest rate, on the country, would mitigate that probability. Policy uncertainty in the advanced world is somewhat positively associated to a greater likelihood of sharp increases in net inflows —and this might be associated to developments in developing countries. On the other hand, greater return and volatility of the U.S. stock market (S&P 500) is negatively associated with the proneness of surges in net inflows.

_Gross inflows_ . Our results from the pull drivers of inflow surges show that outstanding economic performance would help predict future massive inflows of capital regardless of any criteria used for their definition. In most regressions, current account balance has a negative and significant coefficient. Therefore, the larger the deficits in current account the more likely foreign capital will flow to the domestic economy (most notably, to finance these imbalances). On the other hand, surges in inflows will be less likely in countries with more rigid exchange rate regimes with using the CDMN criterion.

On the financial sector front, we robustly find that rapid expansion of credit and real appreciation of the domestic currency (beyond their equilibrium levels) help predict the occurrence of surges in capital inflows. Greater trade openness also lead to greater likelihood of inflows of capital — with natural resource abundant countries experience a higher probability of surges taking place. Finally, countries with greater international financial integration are more likely to experience surges in inflows. The composition of gross capital inflows plays a role in predicting these episodes: debt-type inflows are robustly more likely to precede them.

Push factors also have a significant contribution to the likelihood of inflow surges. Greater external growth and lower world interest rates help predict future surges. Lower returns and lower volatility return in global stock markets (as signal of lower return and risk aversion in world financial markets) may encourage foreign investors to shift their portfolios outside of their own country. Finally, surges in neighboring countries tend to anticipate the massive inflows into the domestic economy.

Table 9 shows our cloglog estimates of inflow surges on both pull and push factors —for both surges in net and gross inflows.

_Net inflows_ . Real economic performance in the domestic economy helps drive a greater likelihood of surges in net inflows. An analogous statistical result is obtained with greater current account deficits. Our cloglog regressions suggest that the current account balance is a more robust predictor of surges in net inflows. Therefore, the direction of this relationship shows that higher current account deficits (that is, lower and/or more negative current account balances) will increase the likelihood of surges in net inflows.

The leverage of the domestic financial system (as proxied by the growth in the credit to GDP ratio) is not robust whereas the real overvaluation of the domestic currency tends to increase the proneness to surges in net inflows. Surges in net inflows are more likely to occur in natural resource abundant countries. Moreover, countries with greater equity inflows tend to mitigate the 24