الفهرس 
Investigating the Impact of Foreign Portfolio Investment on Macro-Economic Stability: Empirical Evidence from Egypt
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Abstract
Over the last two decades, many emerging markets economies have opened up to international capital flows and integrated further into global financial markets. Developing countries have started to depend mainly on foreign portfolio investment (FPI) as an essential form of foreign private capital since 1989s. FPI flows can help countries to allocate resources efficiently, fill the saving-investment gap, and develop financial markets. However, such flows are characterized by their high volatility and sharp reversals. The short-term and high volatile nature of these flows might cause macroeconomic overheating in terms of currency crises and inflationary pressures. As for Egypt, FPI flows have fluctuated significantly in the Egyptian stock market since 1993 to 2020.This high volatility of FPI has drawn attention to assess its possible effects on the Egyptian economy in terms of macro-economic stability Therefore, this study aims to empirically investigate the relationship between FPI flows and inflation rate, which is a critical indicator of macro-economic stability. For this purpose, the study applies a vector autoregressive (VAR) model to test the short-run dynamics among the variables of interest. Also, it conducts the granger-causality test to check the causalities among variables. Additionally, it applies the auto-regressive distributed lag (ARDL) model to examine the long-run relationships among these variables. An error correction (ECM) can then be applied analyzing both the short-run and long-run relationships among the model variables. Empirical results showed that FPI flows increase the inflation rate in Egypt in both the short-run & long-run, thereby negatively impacting the macro-economic stability of the Egyptian economy