Facing the Tides: Managing Capital Flows in Asia

Departmental Papers, October 22, 2019

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Facing the Tides: Managing Capital Flows in Asia

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Bibliographic details

• Authors: Harald Finger, Pablo Lopez Murphy
• Published: October 22, 2019
• Series: Departmental Papers
• DOI: https://doi.org/10.5089/9781513512334.087

Overview

• Authors: Harald Finger, Pablo Lopez Murphy
• Date: October 22, 2019
• Series: Departmental Paper No. 2019/015
• Pages: 77
• DOI: https://doi.org/10.5089/9781513512334.087
• ISBN: 9781513512334
• ISSN: 2616-5333
• Summary statement from the paper: "This paper looks empirically at some economic effects of volatile exchange rates and financial conditions and examines policy responses for managing such volatility. It also sheds light on some economic costs that stem from volatile capital flows and exchange rates and analyzes how countries deploy their policy toolkits in response. The data-driven analysis should contribute to ongoing reflections about how to manage volatile capital flows and exchange rates both in Asian EMEs and more broadly."

Empirical findings and substantive themes

• The paper provides a data-driven empirical examination of:
  • Economic effects of volatile exchange rates.
  • Economic effects of volatile financial conditions.
  • Economic costs that stem from volatile capital flows and exchange rates.
• It analyzes how countries deploy their policy toolkits in response to volatility in capital flows and exchange rates.
• Geographic and topical focus includes Asia and Pacific, with relevance to Asian EMEs and broader global contexts.
• Subject tags used in the paper: Balance of payments, Capital flows, Capital inflows, Central bank policy rate, Depreciation, Exchange rates, Financial services, Foreign exchange, National accounts.
• Keywords listed in the paper include: balance sheet FX mismatch, capital flow, Capital flows, Capital inflows, Central bank policy rate, Depreciation, depreciation shock, DP, DPPP, exchange rate, Exchange rates, foreign exchange intervention, FX liability, Global, intervention response, market, monetary policy, reaction function.

Analytical contributions

• Empirical assessment of the links between volatile capital flows/exchange rates and economic costs.
• Examination of policy responses used by countries facing volatile capital flows and exchange rates, including how policy toolkits are deployed.
• The analysis aims to inform ongoing policy reflections on managing volatile capital flows and exchange rates in Asian EMEs and more broadly.

Intended audience and use

• Designed for policymakers, researchers, and practitioners concerned with capital flow volatility and exchange rate management in Asia and other emerging markets.
• Positioned as a contribution to policy discussions through data-driven evidence on economic effects and policy responses.

Source: Facing the Tides: Managing Capital Flows in Asia, Departmental Paper No. 2019/015, Harald Finger and Pablo Lopez Murphy, October 22, 2019.

Content in this bundle

• Facing the Tides: Managing Capital Flows in Asia; IMF Departmental Paper No. 19/17; October 2019
  • Facing the Tides: Managing Capital Flows in Asia; IMF Departmental Paper No. 19/17; October 2019 (Markdown version)
  • Facing the Tides: Managing Capital Flows in Asia; IMF Departmental Paper No. 19/17; October 2019 (PDF)