{
  "title": "Managing the Tide: How Do Emerging Markets Respond to Capital Flows?",
  "publication": "IMF Working Papers, March 27, 2017",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2017/03/27/managing-the-tide-how-do-emerging-markets-respond-to-capital-flows-44766",
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  "summary": "This paper examines whether—and how—emerging market economies (EMEs) respond to capital flows to mitigate their untoward consequences.",
  "sections": [
    {
      "heading": "Key findings",
      "content": "- Sample: about 50 emerging market economies (EMEs) over 2005Q1–2013Q4.\n- EMEs respond proactively to capital inflows by using a combination of policy tools.\n- Policy toolkit deployed in response to inflows includes:\n  - Central banks raise the policy interest rate to address economic overheating concerns.\n  - Intervention in the foreign exchange market to resist currency appreciation pressures.\n  - Tightening of macroprudential measures to dampen credit growth.\n  - Deployment of capital inflow controls in the face of competitiveness and financial-stability concerns.\n- No evidence found of counter-cyclical fiscal policy in the face of capital inflows, contrary to conventional policy advice to EMEs.\n- Policies are more likely to respond, and to be used in combination, during inflow surges than in more normal times."
    },
    {
      "heading": "Method and scope",
      "content": "- Type: IMF Working Paper.\n- Authors: Atish R. Ghosh; Jonathan David Ostry; Mahvash S Qureshi.\n- Publication date: March 27, 2017.\n- Coverage period: 2005Q1–2013Q4.\n- Sample size: about 50 EMEs.\n- Length: 41 pages.\n- Series and identifiers:\n  - Working Paper No. 2017/069\n  - Issue: 069\n  - DOI: https://doi.org/10.5089/9781475589207.001\n  - ISBN: 9781475589207\n  - ISSN: 1018-5941\n  - Stock No: WPIEA2017069"
    },
    {
      "heading": "Subject areas and keywords",
      "content": "- Subject: Balance of payments; Capital controls; Capital flows; Capital inflows; Central bank policy rate; Financial services; Foreign exchange; Output gap; Production.\n- Keywords: capital control; capital controls; capital flow; capital flows; Capital inflows; Central bank policy rate; emerging market economies; exchange rate; FX intervention; Global; inflow control; outflow control; Output gap; policy toolkit; prudential measure; WP"
    },
    {
      "heading": "Policy implications and interpretation",
      "content": "- Monetary policy: Raising policy interest rates is a common EME response to curb overheating associated with capital inflows.\n- FX policy: Foreign exchange intervention is used to resist appreciation pressures that accompany inflows.\n- Macroprudential policy: Authorities tighten prudential measures to temper credit expansion driven by inflows.\n- Capital flow management: Capital inflow controls are applied when competitiveness or financial-stability concerns arise.\n- Fiscal policy: EMEs did not exhibit counter-cyclical fiscal responses to capital inflows in the study period.\n- Coordination and sequencing: Policymakers are more likely to combine tools and to act decisively during inflow surges compared with normal times.\n\nIMF Working Paper: Atish R. Ghosh; Jonathan David Ostry; Mahvash S Qureshi. \"Managing the Tide: How Do Emerging Markets Respond to Capital Flows?\", March 27, 2017, Working Paper No. 2017/069.\n\n---\n\n Content in this bundle\n\n- Managing the Tide: How Do Emerging Markets Respond to Capital Flows?, WP/17/69, March 2017\n  - Managing the Tide: How Do Emerging Markets Respond to Capital Flows?, WP/17/69, March 2017 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Managing the Tide: How Do Emerging Markets Respond to Capital Flows?, WP/17/69, March 2017 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2017/03/27/managing-the-tide-how-do-emerging-markets-respond-to-capital-flows-44766"
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    "Authors: Atish R. Ghosh, Jonathan David Ostry, Mahvash S Qureshi",
    "Published: March 27, 2017",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781475589207.001",
    "Sample: about 50 emerging market economies (EMEs) over 2005Q1–2013Q4.",
    "EMEs respond proactively to capital inflows by using a combination of policy tools.",
    "Policy toolkit deployed in response to inflows includes:",
    "No evidence found of counter-cyclical fiscal policy in the face of capital inflows, contrary to conventional policy advice to EMEs.",
    "Policies are more likely to respond, and to be used in combination, during inflow surges than in more normal times.",
    "Type: IMF Working Paper.",
    "Authors: Atish R. Ghosh; Jonathan David Ostry; Mahvash S Qureshi.",
    "Publication date: March 27, 2017.",
    "Coverage period: 2005Q1–2013Q4.",
    "Sample size: about 50 EMEs.",
    "Length: 41 pages.",
    "Series and identifiers:",
    "Subject: Balance of payments; Capital controls; Capital flows; Capital inflows; Central bank policy rate; Financial services; Foreign exchange; Output gap; Production.",
    "Keywords: capital control; capital controls; capital flow; capital flows; Capital inflows; Central bank policy rate; emerging market economies; exchange rate; FX intervention; Global; inflow control; outflow control; Output gap; policy toolkit; prudential measure; WP",
    "Monetary policy: Raising policy interest rates is a common EME response to curb overheating associated with capital inflows.",
    "FX policy: Foreign exchange intervention is used to resist appreciation pressures that accompany inflows.",
    "Macroprudential policy: Authorities tighten prudential measures to temper credit expansion driven by inflows.",
    "Capital flow management: Capital inflow controls are applied when competitiveness or financial-stability concerns arise.",
    "Fiscal policy: EMEs did not exhibit counter-cyclical fiscal responses to capital inflows in the study period.",
    "Coordination and sequencing: Policymakers are more likely to combine tools and to act decisively during inflow surges compared with normal times.",
    "**Managing the Tide: How Do Emerging Markets Respond to Capital Flows?, WP/17/69, March 2017**"
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