Are capital outflows associated with highly expansionary monetary policies dangerous or positive? The examples of the euro zone and Japan

Due to the fall in interest rates, highly expansionary monetary policies normally lead to capital outflows. These capital outflows can be considered as: Negative and dangerous, since they reduce the financing of the economy (the country ’s savings finance other countries); Positive, since they lead to a depreciation of the exchange rate and an industrial recovery . Which of these two views is right? We look at recent episodes of highly expansionary monetary policy in the euro zone ( since 2014) and in Japan ( s ince 2013). We see that the positive effect (depreciation and upturn in industry) is present, but not the negative effect (slowdown in financing).