clearly and transparently as possible to help align expectations and avoid market disruptions. and we will continue to help build resilience in the financial system and support global efforts to do the same. rey ( 2015 ) ; miranda - agrippino and rey ( 2015 ). for example, londono and wilson ( 2018 ) find that u. s. monetary policy variables account for only roughly 10 percent of the six - month ahead forecast error variance of the vix. in fact, in their study, nonu. s. global factors ( non - u. s industrial production, a global economic policy uncertainty index, and the expected probability of recessions outside of the united states ) explain nearly as much of the vix forecast error variance as u. s. monetary policy and other u. s. variables combined. in addition, cerutti, claessens, and rose ( 2017 ) find that directly observed variables in “ center ” countries ( including vix ), as well as unobserved common dynamic factors extracted from actual capital flows, together rarely explain more than one - fourth of the variation in most types of capital flows. - 6references adrian, tobias, daniel stackman, and erik vogt ( 2017 ). “ global price of risk and stabilization policies, ” paper presented at “ eighteenth jacques polak annual research conference : the global financial cycle, ” sponsored by the international monetary fund, washington, november 2 - 3. washington : imf, https : / / www. imf. org / ~ / media / files / conferences / 2017 - annual - researchconference / adrian - s6. ashx. ahmed, shaghil, and andrei zlate ( 2014 ). “ capital flows to emerging market economies : a brave new world? ” journal of international money and finance, vol. 48 ( november ), pp. 221 - 48. bems, rudolfs, luis catao, zsoka koczan, weicheng lian, and marcos poplawskiribeiro ( 2016 ). “ understanding the slowdown in capital flows to emerging markets, ” chapter 2 in world economic outlook : too slow for too long. washington : international monetary fund, april, pp. 63 - 99, https : / / www. imf. org / en / publications / weo / issues / 2016 / 12 / 31 / world - economicoutlook - april - 2016 - too - slow - for - too

when the federal funds rate was comparatively high. the subsequent surge in capital flows in 2009, as the crisis was abating, largely reflects a rebound from the capital flow interruption during the crisis itself, though highly accommodative monetary policies in advanced economies doubtless also played a role. moreover, capital flows to emes started to ease after 2011, a period when the federal reserve continued to add accommodation and reduce yields through increases in its balance sheet, as shown in the right panel. and, more recently, capital flows to emes have picked up again despite the fact that the fed has been removing accommodation since 2015. if u. s. monetary policy is not the major determinant, what other factors have been driving eme capital flows? one prominent factor has been growth differentials between emes and advanced economies. in figure 5, the left panel shows that capital inflows to emes picked up post - crisis, in line with the widening of this growth differential, while the slowdown in inflows after 2011 coincides with its narrowing. another related determinant has been commodity prices, as shown in the right panel. the pickup in both global growth and commodity prices over the past couple of years explains a good part of the recent recovery of capital flows to emes. 5 see, for example, wheatley and garnham ( 2010 ) and rajan ( 2014 ). studies looking at the determinants of eme capital flows include chari and others ( 2017 ), clark and others ( 2016 ), bems and others ( 2016 ), koepke ( 2015 ), ahmed and zlate ( 2014 ), fratzscher ( 2012 ), and - 4monetary stimulus by the fed and other advanced - economy central banks played a relatively limited role in the surge of capital flows to emes in recent years. there is good reason to think that the normalization of monetary policies in advanced economies should continue to prove manageable for emes. fed policy normalization has proceeded without disruption to financial markets, and market participants ’ expectations for policy ( the red symbols in figure 6 ) seem reasonably well aligned with policymakers ’ expectations in the summary of economic projections ( the black dots ), suggesting that markets should not be surprised by our actions if the economy evolves in line with expectations. it also bears emphasizing that the emes themselves have made considerable progress in reducing vulnerabilities since the crisis - prone 1980s and 1990s. many