Implications Of A Surge In Capital Inflows

Author : Jang-Yung Lee
Publisher : International Monetary Fund
ISBN 13 : 1451847343
Total Pages : 66 pages
Book Rating : 4.45/5 ( download)

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Download or read book Implications of a Surge in Capital Inflows written by Jang-Yung Lee and published by International Monetary Fund. This book was released on 1996-05-01 with total page 66 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper seeks to extend discussion of monetary policy instruments to the situation of a country faced with major capital inflows when the process of domestic financial liberalization is incomplete. It briefly summarizes the recent usage of traditional monetary instruments, discusses the practical limits to classic sterilization measures as well as the pros and cons of using other supplementary measures including tax-based controls on capital inflows. It also examines the efficacy of such measures in Chile, Colombia, Indonesia, Korea, Spain, and Thailand. The conclusion is that, for a time and as a transitional measure, a country may find it opportune to supplement the traditional instruments with certain “belt and braces” measures including, in some instances, indirect (tax-based) capital controls.

Author : Mr.Atish R. Ghosh
Publisher : International Monetary Fund
ISBN 13 : 1463942303
Total Pages : 43 pages
Book Rating : 4.04/5 ( download)

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Download or read book Surges written by Mr.Atish R. Ghosh and published by International Monetary Fund. This book was released on 2012-01-01 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines why surges in capital flows to emerging market economies (EMEs) occur, and what determines the allocation of capital across countries during such surge episodes. We use two different methodologies to identify surges in EMEs over 1980-2009, differentiating between those mainly caused by changes in the country's external liabilities (reflecting the investment decisions of foreigners), and those caused by changes in its assets (reflecting the decisions of residents). Global factors-including US interest rates and risk aversion¡-are key to determining whether a surge will occur, but domestic factors such as the country's external financing needs (as implied by an intertemporal optimizing model of the current account) and structural characteristics also matter, which explains why not all EMEs experience surges. Conditional on a surge occurring, moreover, the magnitude of the capital inflow depends largely on domestic factors including the country's external financing needs, and the exchange rate regime. Finally, while similar factors explain asset- and liability-driven surges, the latter are more sensitive to global factors and contagion.

Author : Eduardo Fernandez-Arias
Publisher : World Bank Publications
ISBN 13 :
Total Pages : 54 pages
Book Rating : 4./5 ( download)

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Download or read book The Surge in Capital Inflows to Developing Countries written by Eduardo Fernandez-Arias and published by World Bank Publications. This book was released on 1995 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Author : Mr.R. G Gelos
Publisher : International Monetary Fund
ISBN 13 : 1513522906
Total Pages : 44 pages
Book Rating : 4.06/5 ( download)

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Download or read book Capital Flows at Risk: Taming the Ebbs and Flows written by Mr.R. G Gelos and published by International Monetary Fund. This book was released on 2019-12-20 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: The volatility of capital flows to emerging markets continues to pose challenges to policymakers. In this paper, we propose a new framework to answer critical policy questions: What policies and policy frameworks are most effective in dampening sharp capital flow movements in response to global shocks? What are the near- versus medium-term trade-offs of different policies? We tackle these questions using a quantile regression framework to predict the entire future probability distribution of capital flows to emerging markets, based on current domestic structural characteristics, policies, and global financial conditions. This new approach allows policymakers to quantify capital flows risks and evaluate policy tools to mitigate them, thus building the foundation of a risk management framework for capital flows.

Author : Chang-yŏng Yi
Publisher :
ISBN 13 :
Total Pages : 58 pages
Book Rating : 4.95/5 ( download)

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Download or read book Implications of a Surge in Capital Inflows written by Chang-yŏng Yi and published by . This book was released on 1996 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Author : Ms.Deniz O Igan
Publisher : International Monetary Fund
ISBN 13 : 1475558562
Total Pages : 50 pages
Book Rating : 4.62/5 ( download)

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Download or read book Real Effects of Capital Inflows in Emerging Markets written by Ms.Deniz O Igan and published by International Monetary Fund. This book was released on 2016-12-06 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine the association between capital inflows and industry growth in a sample of 22 emerging market economies from 1998 to 2010. We expect more external finance dependent industries in countries that host more capital inflows to grow disproportionately faster. This is indeed the case in the pre-crisis period of 1998–2007, and is driven by debt, rather than equity, inflows. We also observe a reduction in output volatility but this association is more pronounced for equity, rather than debt, inflows. These relationships, however, break down during the crisis, hinting at the importance of an undisrupted global financial system for emerging markets to harness the growth benefits of capital inflows. In line with this observation, we also document that the inflows-growth nexus is stronger in countries with well-functioning banks.

Author : Masahiro Kawai
Publisher : Edward Elgar Publishing
ISBN 13 : 184980687X
Total Pages : 465 pages
Book Rating : 4.79/5 ( download)

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Download or read book Managing Capital Flows written by Masahiro Kawai and published by Edward Elgar Publishing. This book was released on 2010-01-01 with total page 465 pages. Available in PDF, EPUB and Kindle. Book excerpt: Managing Capital Flows provides analyses that can help policymakers develop a framework for managing capital flows that is consistent with prudent macroeconomic and financial sector stability. While capital inflows can provide emerging market economies with invaluable benefits in pursuing economic development and growth, they can also pose serious policy challenges for macroeconomic management and financial sector supervision. The expert contributors cover a wide range of issues related to managing capital flows and analyze the experience of emerging Asian economies in dealing with surges in capital inflows. They also discuss possible policy measures to manage capital flows while remaining consistent with the goals of macroeconomic and financial sector stability. Building on this analysis, the book presents options for workable national policies and regional policy cooperation, particularly in exchange rate management. Containing chapters that bring in international experiences relevant to Asia and other emerging market economies, this insightful book will appeal to policymakers in governments and financial institutions, as well as public and private finance experts. It will also be of great interest to advanced students and academic researchers in finance.

Author : Mr.Alejandro Lopez Mejia
Publisher : International Monetary Fund
ISBN 13 : 1451843518
Total Pages : 55 pages
Book Rating : 4.14/5 ( download)

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Download or read book Large Capital Flows written by Mr.Alejandro Lopez Mejia and published by International Monetary Fund. This book was released on 1999-02-01 with total page 55 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper reviews the causes, consequences, and policy responses to large capital flows in several emerging markets. It opens by studying recent patterns of capital flows, and then discusses the causes of capital flows. Emphasis is given to the reasons behind the capital inflow episode in the 1990s, the major reversals, and the volatility observed in these flows. The paper goes on to examine the consequences of capital inflows and the pros and cons of alternative policy responses. It concludes with policy lessons derived from country experiences.

Author : Eduardo Fernández-Arias
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.70/5 ( download)

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Download or read book The Surge in Capital Inflows to Developing Countries: Prospects and Policy Response written by Eduardo Fernández-Arias and published by . This book was released on 1999 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: June 1995 After being excluded from world capital markets during the debt crisis, many developing countries have experienced large capital inflows in the past five years. The challenges these inflows pose for domestice policy have generated a substantial literature. The authors review and extend that literature. They characterize the new inflows, assess their causes and the likelihood of sustainability, analyze the policy issues they raise, and evaluate the possible policy responses. Their conclusions tie desirable policy responses to characteristics of both the flows themselves and to those of the recipient economy. Regarding the forces driving the current episode, they conclude that generally, the role of foreign interest rates as a push factor driving capital inflows and determining their magnitude has been well-established. On the other hand, country creditworthiness has helped determine both the timing and destination of the new capital flows. Even if creditworthiness is maintained, the early level of inflows is unlikely to be sustained. The pace of reduction in flows to countries that have been receiving them since the early 1990s depends on the path of foreign interest rates and the role of stock adjustment. But a loss of creditworthiness caused by a deterioration in domestic policy would stop inflows quickly and, depending on the circumstances, inflows may be replaced by substantial outflows and an outright balance of payments crisis. What are the implications for policy in recipient countries? Briefly, the receipt of capital inflows may strengthen the case for removing macroeconomic distortions, either because such inflows aggravate the cost of such distortions or because they ease the constraints that originally motivated their adoption. While direct intervention may not be feasible (because controls may be easily evaded), controls may sometimes be a second-best policy. To the extent that capital inflows are permitted to materialize, the desirability of foreign exhcange intervention depends on what is required for macroeconomic stability. Sterilized foreign exchange intervention to prevent overstimulation of demand with a fixed exchange rate may not be feasible or effective. A commensurate reduction in the money multiplier, achieved by increasing reserve requirements, may also have limited effects. The effectiveness of both measures depends on the structure of the domestic financial system. If domestic monetary expansion is not avoided, or if an expansionary financial stimulus is transmitted outside the banking system, the stabilization of total demand will require fiscal contraction.

Author : International Monetary Fund
Publisher : International Monetary Fund
ISBN 13 : 1498342620
Total Pages : 45 pages
Book Rating : 4.29/5 ( download)

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Download or read book Staff Guidance Note on Macroprudential Policy written by International Monetary Fund and published by International Monetary Fund. This book was released on 2014-06-11 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: This note provides guidance to facilitate the staff’s advice on macroprudential policy in Fund surveillance. It elaborates on the principles set out in the “Key Aspects of Macroprudential Policy,” taking into account the work of international standard setters as well as the evolving country experience with macroprudential policy. The main note is accompanied by supplements offering Detailed Guidance on Instruments and Considerations for Low Income Countries