Managing Large-Scale Capital Inflows: The Case of the Czech Republic, Poland and Romania

 
Author/Editor: Chowdhury, Ibrahim ; Keller, Leonor
 
Publication Date: May 01, 2012
 
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
 
Summary: Many emerging market economies have in the recent past experienced a surge in capital inflows that may threaten their economic and financial stability. The IMF in early 2011 proposed a framework intended to guide Fund advice to policymakers on how to best respond to such inflows, including both macroeconomic instruments and so-called capital flow management measures (CFMs). The paper applies this framework to three countries that have experienced elevated capital inflows after the onset of the 2008 global financial crisis - the Czech Republic, Poland, and Romania. It finds that the evaluation of the macroeconomic criteria as prescribed by the framework does not support the use of CFMs, but instead advocates macroeconomic policies as the first line of defense against large-scale capital inflows. This finding is by and large consistent with the IMF’s policy advice given to country authorities in the context of surveillance missions.
 
Series: Working Paper No. 12/138
Subject(s): Capital flows | Capital inflows | Emerging markets | Fiscal policy | Monetary policy | Czech Republic | Poland | Romania

Author's Keyword(s): Capital inflows | capital controls
 
English
Publication Date: May 01, 2012
Format: Paper
Stock No: WPIEA2012138 Pages: 25
Price:
US$18.00 (Academic Rate:
US$18.00 )
 
 
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