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Float in Order to Fix?: Lessons from Emerging Markets for EU Accession Countries

  • Jorge Braga de Macedo
  • Helmut Reisen

The so-called “accession economies” preparing to enter the European Union are experiencing increased inward capital flows based upon positive interest spreads and expectations of currency appreciation. While the authorities of these countries have tried to manage these flows and to prevent unjustified appreciation of their currencies, the policy mix they may be tempted to apply can benefit from experiences elsewhere. Episodes of heavy capital inflows are well known to emerging markets and have often ended in tears. The 1990s saw three separate regional currency crises: the European crisis of 1992-93, the Latin American crisis 1994-95, and the Asian crisis 1997- 98 followed by crises in Russia and Brazil, and recently by Turkey and Argentina. Obviously, a major currency crisis every 24 months is too much for policy makers’ comfort. The virulence, speed and contagion of financial crises that have hit prospective entrants to rich-country clubs repeatedly over the past two decades have ... Les pays « candidats » à l’Union européenne connaissent une recrudescence des flux de capitaux alimentée par des écarts positifs de taux d’intérêt et l’anticipation d’une appréciation de leur monnaie. Si les autorités de ces pays se sont efforcées de gérer ces flux et d’empêcher une appréciation injustifiée de leur monnaie, elles auraient néanmoins tout intérêt à tirer les leçons de l’expérience d’autres pays avant d’opter pour telle ou telle combinaison de mesures. Les marchés émergents connaissent bien ces épisodes d’afflux massifs de capitaux, qui finissent souvent mal. Trois régions ont connu des crises de change dans les années 1990 — l’Europe, en 1992-93 ; l’Amérique latine, en 1994-95 ; et l’Asie, en 1997-98, qui a eu des répliques en Russie et au Brésil et, plus récemment, en Turquie et en Argentine. De toute évidence, les décideurs ne peuvent tolérer l’apparition d’une grave crise des changes tous les deux ans. La virulence, la rapidité et le pouvoir de contagion des ...

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Paper provided by OECD Publishing in its series OECD Development Centre Working Papers with number 218.

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Date of creation: Nov 2003
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Handle: RePEc:oec:devaaa:218-en
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