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The Real Effects of Capital Inflows on Emerging Markets

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  • Robert Dekle

    (Department of Economics, University of Southern California, Los Angeles, CA, USA)

  • Cheng Hsiao

    (Department of Economics, University of Southern California, Los Angeles, CA, USA)

  • Siyan Wang

    (Department of Economics, University of Southern California, Los Angeles, CA, USA)

Abstract

We employ vector autoregression and cointegration estimation to examine the impact of net capital inflows on real exchange rates, output and real interest rates in several East Asian and Latin American economies during the 1990s. We find that increases in net capital inflows leads to appreciations of the real exchange rates in all the countries but have no impact on real output except for Thailand.

Suggested Citation

  • Robert Dekle & Cheng Hsiao & Siyan Wang, 2001. "The Real Effects of Capital Inflows on Emerging Markets," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 4(02), pages 165-202.
    • Handle: RePEc:wsi:rpbfmp:v:04:y:2001:i:02:n:s0219091501000413
    DOI: 10.1142/S0219091501000413
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    More about this item

    Keywords

    Capital Flow; Output; Exchange Rate; Vector Autoregression;
    All these keywords.

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • G2 - Financial Economics - - Financial Institutions and Services
    • G3 - Financial Economics - - Corporate Finance and Governance

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