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Macroeconomics of Capital Flows to Latin America: Experience and Policy Issues

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  • Michael Gavin
  • Ricardo Hausmann
  • Leonardo Leiderman

Abstract

This paper reviews recent experience with international capital flows in Latin America, and discusses the policy issues that surround them. The paper is predicated on three basic premises. Capital flows to the region are an important source of macroeconomic disturbance. Also, capital flows are very volatile. Large fluctuations in these flows are due in substantial part to factors external to Latin America. In addition, the fluctuations require a policy response. Policy should respond to sudden inflows or outflows of capital.

Suggested Citation

  • Michael Gavin & Ricardo Hausmann & Leonardo Leiderman, 1995. "Macroeconomics of Capital Flows to Latin America: Experience and Policy Issues," Research Department Publications 4012, Inter-American Development Bank, Research Department.
    • Handle: RePEc:idb:wpaper:4012
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    References listed on IDEAS

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