Large Capital Flows: A Survey of the Causes, Consequences, and Policy Responses

February 1, 1999

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

This paper reviews the causes, consequences, and policy responses to large capital flows in several emerging markets. It opens by studying recent patterns of capital flows, and then discusses the causes of capital flows. Emphasis is given to the reasons behind the capital inflow episode in the 1990s, the major reversals, and the volatility observed in these flows. The paper goes on to examine the consequences of capital inflows and the pros and cons of alternative policy responses. It concludes with policy lessons derived from country experiences.

Subject: Balance of payments, Capital controls, Capital flows, Capital inflows, Foreign exchange, Private capital flows, Real exchange rates

Keywords: adverse selection, Asia and Pacific, balance of payments, capital control, Capital controls, capital flow, Capital Flows, Capital inflows, capital net, capitalization rate, Crises, current account, Eastern Europe, financial system, Global, Middle East, mobility consist, net capital, open economy, Policy Responses, Private capital flows, Real exchange rates, stabilization program, Survey, Western Hemisphere, WP

Pages:
54
Volume:
1999
DOI:
https://doi.org/10.5089/9781451843514.001
Issue:
017
Series:
Working Paper No. 1999/017
Stock No:
WPIEA0171999
ISBN:
9781451843514
ISSN:
1018-5941

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