Sterilization of short-term capital inflows--through lower interest rates?
AbstractOctober 2000 Reductions in international interest rates are a major cause of capital flows to emerging economies. Increases in domestic interest rates are a frequent policy response to the resulting price increases. This is often unsuccessful. The paper suggests a theoretical explanation based on distinctive features of emerging financial markets, including imperfect asset substitutability and imperfect capital mobility for some sectors of the economy. It concludes that the appropriate policy response to capital inflows may be lower interest rates. Keywords: intellectual property rights, copyright, sui generis protection of expressive material, economics of information-goods, open science, "fair use," scientific databases. JEL Classification: H4, K39, O31, O34 -->
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of International Money and Finance.
Volume (Year): 23 (2004)
Issue (Month): 7-8 ()
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Web page: http://www.elsevier.com/locate/inca/30443
Other versions of this item:
- Michael Kumhof, . "Sterilization of Short-Term Capital Inflows - Through Lower Interest Rates ?," Working Papers 00018, Stanford University, Department of Economics.
- H4 - Public Economics - - Publicly Provided Goods
- K39 - Law and Economics - - Other Substantive Areas of Law - - - Other
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
- O34 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
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- Aaron Mehrotra, 2012.
"On the use of sterilisation bonds in emerging Asia,"
BIS Papers chapters,
in: Bank for International Settlements (ed.), Are central bank balance sheets in Asia too large?, volume 66, pages 111-131
Bank for International Settlements.
- Mehrotra, Aaron, 2013. "On the use of sterilisation bonds in emerging Asia," BOFIT Discussion Papers 1/2013, Bank of Finland, Institute for Economies in Transition.
- Blaise Gadanecz & Aaron Mehrotra & Madhusudan S Mohanty, 2014. "Foreign exchange intervention and the banking system balance sheet in emerging market economies," BIS Working Papers 445, Bank for International Settlements.
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