Capital Flows in Central and Eastern Europe: Evidence and Policy Options
IMF Working Papers, June 1, 1995
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Bibliographic details
- Authors: Carlos A. Végh Gramont, Ratna Sahay, Guillermo Calvo
- Published: June 1, 1995
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451847741.001
Summary
- This paper examines the nature and composition of capital flows in selected countries in Central and Eastern Europe during 1987–93.
- The data show that there was a remarkable turnaround in the capital account in 1992–93.
- This improvement was accompanied by widening current account deficits, an increase in real consumption, and real exchange rate appreciation.
- In light of these developments, the paper discusses the main macroeconomic concerns raised by capital inflows and lays out the principal policy options relevant for the transition economies.
- Prepared for a seminar on "Western Europe in Transition: The Impact of Opening Up of Eastern Europe and the Former Soviet Union," organized by the Bank of Italy, Austrian National Bank, and the IMF held in Trieste, October 10-11, 1994.
Major findings and observations
- Time period analyzed: 1987–93.
- Notable episode: turnaround in the capital account in 1992–93.
- Associated macroeconomic developments documented:
- widening current account deficits,
- increase in real consumption,
- real exchange rate appreciation.
Policy discussion and options
- The paper discusses the main macroeconomic concerns raised by capital inflows to transition economies.
- It lays out the principal policy options relevant for managing capital inflows in the context of transition economies.
Subject and keywords
- Subject: Balance of payments, Capital account, Capital flows, Capital inflows, External debt, Foreign exchange, Real exchange rates
- Keywords: Asia and Pacific, Capital account, Capital flows, Capital inflows, Central and Eastern Europe, central bank, Eastern Europe, economic system, excess reserves, interest rate, monetary aggregate, nominal exchange rate, price level, Real exchange rates, transition economy, WP
Content derived from the IMF Working Paper "Capital Flows in Central and Eastern Europe: Evidence and Policy Options" (Working Paper No. 1995/057).