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Determinants and repercussions of the composition of capital inflows

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  • Mark Carlson
  • Leonardo Hernandez

Abstract

The Mexican, Asian, and Russian crises of the mid- and late 1990s have renewed the interest among policymakers in the determinants and effects of private capital flows. This paper analyzes whether policies can affect the composition of capital inflows and whether different compositions aggravate crises. We find that, while fundamentals matter, capital controls can affect the mix of capital inflows that countries receive. We find that during the Asian crisis countries with more Yen denominated debt faired worse, while during the Mexican crisis larger short-term debt stocks increased the severity of the crisis.

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File URL: http://www.federalreserve.gov/pubs/ifdp/2002/717/default.htm
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Bibliographic Info

Paper provided by Board of Governors of the Federal Reserve System (U.S.) in its series International Finance Discussion Papers with number 717.

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Date of creation: 2002
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Handle: RePEc:fip:fedgif:717

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Keywords: Capital movements ; Financial crises - Asia ; Financial crises - Mexico;

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  23. Chuhan, Punam & Claessens, Stijn & Mamingi, Nlandu, 1998. "Equity and bond flows to Latin America and Asia: the role of global and country factors," Journal of Development Economics, Elsevier, vol. 55(2), pages 439-463, April.
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  27. Leonardo Hernández & Heinz Rudolph, 1997. "Sustainability of Private Capital Flows to Developing Countries: Is a Generalized Reversal Likely?," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 34(102), pages 237-266.
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