## The Impact of Gray-Listing on Capital Flows: An Analysis Using Machine Learning

_IMF Working Papers, May 27, 2021_

## Source details

**Canonical URL:** [The Impact of Gray-Listing on Capital Flows: An Analysis Using Machine Learning](https://www.imf.org/en/publications/wp/issues/2021/05/27/the-impact-of-gray-listing-on-capital-flows-an-analysis-using-machine-learning-50289)

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## Bibliographic details
- Authors: Mizuho Kida, Simon Paetzold
- Published: May 27, 2021
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513582436.001

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### Summary and main finding
- The Financial Action Task Force’s gray list publicly identifies countries with strategic deficiencies in their AML/CFT regimes (i.e., in their policies to prevent money laundering and the financing of terrorism).
- This paper estimates the magnitude of the effect of gray-listing on a country’s capital flows using an inferential machine learning technique.
- It finds that gray-listing results in a large and statistically significant reduction in capital inflows.

### Methodology
- Analytical approach: inferential machine learning technique applied to measure the impact of gray-listing on capital flows.
- Focus: estimating magnitude of effect on capital inflows attributable to gray-listing.

### Policy relevance and audiences
- Findings are of interest to policy makers, investors, and the Fund.
- Subject areas covered: Anti-money laundering and combating the financing of terrorism (AML/CFT), Balance of payments, Capital flows, Capital inflows, Crime, Foreign direct investment, Machine learning, Technology.

### Keywords and topics emphasized
- AML/CFT
- analysis using machine learning
- Anti-money laundering and combating the financing of terrorism (AML/CFT)
- Capital flows
- capital flows
- Capital inflows
- coefficient estimate
- emerging market economies
- Foreign direct investment
- Global
- gray list
- gray-listing affect
- inferential machine learning technique
- machine learning
- Machine learning

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## Content in this bundle

- **Working Paper**
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_Source: https://www.imf.org/en/publications/wp/issues/2021/05/27/the-impact-of-gray-listing-on-capital-flows-an-analysis-using-machine-learning-50289_