The Effects of Inflation and Exchange Rate Policies on Direct Investment to Developing Countries
This study focuses on the effects of inflation and exchange rate policy on direct investment flows to developing countries. We find that inflation does have a substantial negative effect on capital inflows. Our estimates indicate that this effect can be significantly reduced, but not eliminated, by following exchange rate policies which avoid substantial overvaluation of the currency. [F 30]
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Volume (Year): 12 (1998)
Issue (Month): 1 ()
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References listed on IDEAS
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- Sebastian Edwards, 1990. "Capital Flows, Foreign Direct Investment, and Debt-Equity Swaps in Developing Countries," NBER Working Papers 3497, National Bureau of Economic Research, Inc.
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