Too Much, Too Little, or Too Volatile? International Capital Flows to Developing Countries in the 1990s
AbstractDeveloping countries are constrained in financing current account deficits as real capital mobility is still far from perfect. At the same time, capital flows to these countries proved to be extremely volatile. The paper argues that the long-term problem of "too little" should not be confused with the short-term problem of "too volatile". The former is related to sovereign risk, which may be difficult to overcome. The latter could be kept within limits by financial restructuring towards relatively stable types of capital flows.
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Bibliographic InfoPaper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1036.
Length: 35 pages
Date of creation: Apr 2001
Date of revision:
international capital markets; developing countries; debt; equity investment; sovereign risk; volatility;
Find related papers by JEL classification:
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
- G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
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