Managing Capital Flows: Macroeconomic Analysis and Policies (MCF)

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The course is presented by the Institute for Capacity Development and is devoted to fostering understanding of the dynamics of capital flows and their effects on economic growth, macroeconomic volatility, and risk of crisis.
Coverage includes:
- Refresher on balance of payments statistics and alternative measures of capital flows and financial (capital) account openness.
- Determinants of capital flows and links to economic growth, macroeconomic volatility, and crisis risk.
- Sequencing of capital account liberalization to capture benefits of capital market integration while minimizing and mitigating adverse effects.
- Analytical methods and data sources for analysis and forecasting of capital flows.
- The IMF’s Institutional View on capital flows and its relation to macroeconomic policy, financial regulation, and exchange rate intervention.
- Case studies of actual crises to illustrate how policy settings and failure to address vulnerability buildups led to crisis.
Pedagogy: lectures, discussions, practical workshop exercises, and case studies to solidify understanding of lecture material.

Target audience:
- Mid-level to senior officials from central banks, ministries of finance, and other government agencies.
Qualifications:
- Participants will be expected to have an advanced degree in economics or equivalent experience, and to be proficient in the use of Excel.
Pre-requisites:
- Not applicable.

Explain the dynamics of the capital account using the balance of payments of a given country.
Identify the financial and economic risks that a global capital market creates for both small and large economies.
Determine what challenges a country faces in attempting to stabilize the economy under different economic scenarios.
Understand the appropriate sequencing of capital account liberalization and associated reforms.
Identify how policy actions can influence or prevent the occurrence of capital account crises.
Evaluate the impact of financial reform policies on both economic growth and the risk of financial crisis.
Understand the key features of the IMF’s Institutional View, and the use of macroeconomic policies, macroprudential measures and capital flow management tools.
Propose policy actions to address or avoid future crises and reduce their costs.