Capital Inflows and Real Exchange Rate Appreciation in Latin America: The Role of External Factors

Author/Editor:

Leonardo Leiderman ; Carmen Reinhart ; Guillermo Calvo

Publication Date:

August 1, 1992

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:

The characteristics of recent capital inflows into Latin America are discussed. It is argued that these inflows are partly explained by conditions outside the region, like recession in the United States and lower international interest rates. This suggests the possibility that a reversal of those conditions may lead to a future capital outflow, increasing the macroeconomic vulnerability of Latin American economies. Policy options are argued to be limited.

Series:

Working Paper No. 1992/062

Subject:

Balance of payments Capital account Capital inflows Capital outflows Central banks Foreign exchange International reserves Real exchange rates

Notes:

Also published in Staff Papers, Vol. 40, No. 1, March 1993.

English

Publication Date:

August 1, 1992

ISBN/ISSN:

9781451964455/1018-5941

Stock No:

WPIEA0621992

Pages:

66

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