Leslie LIPSCHITZ () (IMF Institute) Timothy LANE () (IMF, Western Hemisphere Department) Alex MOURMOURAS () (IMF Institute)
Abstract
This paper discusses the forces driving capital flows in the transition countries of Central and Eastern Europe (CEE). It argues that various influences – specifically, the real exchange rate history and trend and the factor intensity of production – can combine to motivate very large capital inflows. These inflows can either undermine attempts at monetary restraint or force excessive appreciations. They can also render the economy highly vulnerable to shifts in market sentiment. The policy implications of the analysis are awkward: exposure to global capital markets sets up difficult dilemmas for policy and leads to vulnerabilities that can be reduced but not eliminated.
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Volume (Year): 56 (2006) Issue (Month): 5-6 (May) Pages: 202-222 Download reference. The following formats are available: HTML
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Find related papers by JEL classification: E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates F3 - International Economics - - International Finance
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Reinhart, Carmen & Calvo, Guillermo, 2002.
"Fear of floating,"
MPRA Paper
14000, University Library of Munich, Germany.
[Downloadable!]
Guillermo A. Calvo & Carmen M. Reinhart, 2000.
"Fear of Floating,"
NBER Working Papers
7993, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)