Managing Capital Flows: Macroeconomic Analysis and Policies (MCF)

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Target Audience: Junior to mid-level policy makers in central banks and finance ministries who have policy responsibilities related to capital flow management and liberalization.
Qualifications: Participants are expected to have an advanced degree in economics or equivalent experience, good quantitative skills, and a basic knowledge of Microsoft Excel.
Pre-requisites: Not applicable.

Aim: Foster understanding of the dynamics of capital flows and their effects on economic growth, macroeconomic volatility, and risk of crisis.
Initial module: Refresher on balance of payments statistics and a description of alternative measures of capital flows and financial (capital) account openness.
Determinants and links: Introduction to the determinants of capital flows and the link between these flows and economic growth, macroeconomic volatility, and crisis risk.
Liberalization sequencing: Discussion of sequencing capital account liberalization to reap the benefits of capital market integration while minimizing and mitigating its adverse effects.
Analytical tools: Coverage of analytical methods and data sources for the analysis and forecasting of capital flows.
Institutional framework: Discussion of the IMF's Institutional View on capital flows and how it relates to macroeconomic policy, macroprudential measures, capital flow management tools, and exchange rate intervention.
Case studies and exercises: Case studies of actual crises to illustrate how policy setting and failure to recognize and address the buildup of vulnerabilities led to crisis; practical workshop exercises and discussions to solidify understanding of lecture material.

Identify the financial and economic risks that a global capital market creates for both small and large economies.
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.