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The capital inflows problem: Concepts and issues

Author

Listed:
  • Reinhart, Carmen
  • Calvo, Guillermo
  • Leiderman, Leonardo

Abstract

Since 1990 capital has flowed from industrial countries to developing regions like Latin America, and parts of Asia. Reentry into international capital markets is a welcome turn of events for most countries. However, capital inflows are often associated with inflationary pressures, a real exchange rate appreciation, a deterioration in the current account, and a boom in bank lending. This paper briefly examines how these inflows have altered the macroeconomic environment in a number of Asian and Latin American countries. The pros and cons of the policy options are discussed.

Suggested Citation

  • Reinhart, Carmen & Calvo, Guillermo & Leiderman, Leonardo, 1994. "The capital inflows problem: Concepts and issues," MPRA Paper 13902, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:13902
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    References listed on IDEAS

    as
    1. Donald J Mathieson & Liliana Rojas-Suárez, 1992. "Liberalization of the Capital Account; Experiences and Issues," IMF Working Papers 92/46, International Monetary Fund.
    2. Chuhan, Punam & Claessens, Stijn & Mamingi, Nlandu, 1998. "Equity and bond flows to Latin America and Asia: the role of global and country factors," Journal of Development Economics, Elsevier, vol. 55(2), pages 439-463, April.
    3. Chuhan, Punam*Claessens,Constantijn A.*Mamingi,, 1993. "Equity and bond flows to Asia and Latin America : the role of global and country factors," Policy Research Working Paper Series 1160, The World Bank.
    4. Kenneth B. Bercuson & Linda M. Koenig, 1993. "The Recent Surge in Capital Inflows to Three ASEAN Countries: Causes and Macroeconomic Impact," Occasional Papers, South East Asian Central Banks (SEACEN) Research and Training Centre, number occ15, April.
    5. Calvo, Guillermo & Vegh, Carlos, 1992. "Currency Substitution in Developing Countries: An Introduction," MPRA Paper 20338, University Library of Munich, Germany.
    6. Guillermo A. Calvo, 1991. "The Perils of Sterilization," IMF Staff Papers, Palgrave Macmillan, vol. 38(4), pages 921-926, December.
    7. Mohamed A. El-Erian, 1992. "Restoration of Access to Voluntary Capital Market Financing: The Recent Latin American Experience," IMF Staff Papers, Palgrave Macmillan, vol. 39(1), pages 175-194, March.
    8. Reinhart, Carmen & Leiderman, Leonardo, 1994. "Capital inflows to Latin America," MPRA Paper 13406, University Library of Munich, Germany.
    9. D. F. I. Folkerts-Landau & Donald J Mathieson & Morris Goldstein & Liliana Rojas-Suárez & José Saúl Lizondo & Timothy D. Lane, 1991. "Determinants and Systemic Consequences of International Capital Flows," IMF Occasional Papers 77, International Monetary Fund.
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    More about this item

    Keywords

    capital flows real exchange rate international reserves current account deficit volatility fiscal policy;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F30 - International Economics - - International Finance - - - General
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook

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