Capital flows to emerging markets: Liberalization, overshooting and volatility (a comment)
AbstractComment on: Philiippe Bachetta and Eric Van Wincoop, who in this paper aim is to assess the impact of financial liberalization in emerging markets on the dynamics of capital flows to these countries. By positing a cost of absorbing these flows, the authors explain how liberalization can give rise to an “overshooting” of capital inflows and asset prices. In addition, the authors examine whether incomplete information can give rise to a high degree of volatility in capital flows as well as to contagion. They also suggest that deviations in capital inflows from their steady-state levels can be used as a potential signal of future crises.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 13203.
Date of creation: 2000
Date of revision:
Capital flows liberalization investment volatility asset price bubbles;
Find related papers by JEL classification:
- F3 - International Economics - - International Finance
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
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