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Capital flows to emerging markets

Author

Listed:
  • Adrian Penalver

Abstract

Capital flows to emerging market economies have occurred in cycles, with booms in lending often followed by financial crises. Economic theory, though, has had little to say on the optimal rate at which capital should flow. In this paper a model due to Barro, Mankiw and Sala-i-Martin is extended to make it more appropriate for analysis of emerging market economies, and optimal capital flows based on an estimated Barro-style conditional convergence growth equation are calculated. Flows derived from the model are lower than actually observed over the estimation period (1988-97) but the results are sensitive to the parameters chosen.

Suggested Citation

  • Adrian Penalver, 2003. "Capital flows to emerging markets," Bank of England working papers 183, Bank of England.
    • Handle: RePEc:boe:boeewp:183
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    File URL: http://www.bankofengland.co.uk/archive/Documents/historicpubs/workingpapers/2003/wp183.pdf
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    References listed on IDEAS

    as
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    Cited by:

    1. Beatriz Gaitan & Bernd Lucke, 2007. "The Barcelona initiative and the importance of NTBs: a dynamic CGE-analysis for Syria," International Economics and Economic Policy, Springer, vol. 4(1), pages 33-59, April.

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