Marcel Fratzscher's working paper analyzes the role of common and idiosyncratic factors in driving global capital flows during the 2007-08 financial crisis and subsequent recovery. Using a factor model and high-frequency data on portfolio capital flows to 50 economies, the paper finds that common shocks, including changes in liquidity and risk, had a significant impact on capital flows during the crisis and recovery. However, the effects varied greatly across countries, with differences in domestic institutions, country risk, and macroeconomic fundamentals explaining much of this heterogeneity. The paper concludes that common factors ("push" factors) were the main drivers of capital flows during the crisis, while country-specific determinants ("pull" factors) became more important in explaining capital flows during the recovery, particularly for emerging markets. The findings highlight the importance of understanding the drivers of capital flows for economic policy and the need for countries to strengthen their institutions and financial policies to better manage global shocks. The paper also discusses the implications of these findings for the management of volatile capital flows, including the potential use of capital controls.Marcel Fratzscher's working paper analyzes the role of common and idiosyncratic factors in driving global capital flows during the 2007-08 financial crisis and subsequent recovery. Using a factor model and high-frequency data on portfolio capital flows to 50 economies, the paper finds that common shocks, including changes in liquidity and risk, had a significant impact on capital flows during the crisis and recovery. However, the effects varied greatly across countries, with differences in domestic institutions, country risk, and macroeconomic fundamentals explaining much of this heterogeneity. The paper concludes that common factors ("push" factors) were the main drivers of capital flows during the crisis, while country-specific determinants ("pull" factors) became more important in explaining capital flows during the recovery, particularly for emerging markets. The findings highlight the importance of understanding the drivers of capital flows for economic policy and the need for countries to strengthen their institutions and financial policies to better manage global shocks. The paper also discusses the implications of these findings for the management of volatile capital flows, including the potential use of capital controls.