Determinants and Repercussions of the Composition of Capital Inflows

IMF Working Papers, May 1, 2002

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Determinants and Repercussions of the Composition of Capital Inflows

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Bibliographic details

• Authors: Mark S. Carlson, Leonardo Hernández
• Published: May 1, 2002
• Series: IMF Working Papers
• DOI: https://doi.org/10.5089/9781451850895.001

Summary and objectives

• The paper examines whether policies can affect the composition of private capital inflows and whether different compositions aggravate crises, motivated by the Mexican, Asian, and Russian crises of the mid- and late 1990s.
• It analyzes links between inflow composition (denomination, maturity, instrument) and crisis severity across episodes.

Key empirical findings

• "While fundamentals matter, capital controls can affect the mix of capital inflows that countries receive."
• During the Asian crisis, countries with more yen-denominated debt "faired worse."
• During the Mexican crisis, larger short-term debt stocks increased the severity of the crisis.

Policy implications and interpretation

• Capital controls are a policy tool that can alter the composition of capital inflows even when macroeconomic fundamentals remain important.
• Attention to the currency denomination of external debt (for example, yen-denominated debt) and to the maturity structure (short-term debt stocks) is critical for crisis vulnerability.
• Managing the mix of inflows—through policy settings that influence denomination and maturity—can be relevant for crisis mitigation strategies.

Publication and bibliographic facts

• Authors: Mark S. Carlson, Leonardo Hernández
• Date: May 1, 2002
• Series: Working Paper No. 2002/086
• Issue: 086
• Volume: 2002
• Pages: 50
• DOI: https://doi.org/10.5089/9781451850895.001
• Stock No: WPIEA0862002
• ISBN: 9781451850895
• ISSN: 1018-5941
• Citation format (Chicago) provided: Mark S. Carlson, and Leonardo Hernández. "Determinants and Repercussions of the Composition of Capital Inflows", IMF Working Papers 2002, 086 (2002), accessed 9/17/2026, https://doi.org/10.5089/9781451850895.001

Source: IMF Working Paper — "Determinants and Repercussions of the Composition of Capital Inflows" (Working Paper No. 2002/086).

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• Determinants and Repercussions of the Composition of Capital Inflows - WP/02/86
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