Capital Inflows and Balance of Payments Pressures : Tailoring Policy Responses in Emerging Market Economies

Author/Editor:

Bikas Joshi ; Manuela Goretti ; Uma Ramakrishnan ; Alun H. Thomas ; Atish R. Ghosh ; Juan Zalduendo

Publication Date:

June 1, 2008

Electronic Access:

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Disclaimer: This Policy Dicussion 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:

Although capital inflows are generally beneficial to recipient countries, they also pose a challenge for the conduct of economic policy. This paper proposes a conceptual taxonomy to guide the design of policy responses in the face of capital flows. We explore how responses to capital surges should be differentiated based on the source of balance of payments pressures. We also examine whether the policy choices in emerging market countries conform to the taxonomy's predictions and find some correspondence, especially during periods of high global liquidity.

Series:

Policy Discussion Paper No. 08/2

Subject:

Frequency:

Quarterly

English

Publication Date:

June 1, 2008

ISBN/ISSN:

9781451945997/1934-7456

Stock No:

PPIEA2008002

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

21

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